* Expects no breakthrough at meeting with Sarkozy *
The leaders of Germany and France, meeting on Tuesday under pressure to propose new plans for tackling the euro zone debt crisis, will not discuss the topic of common bonds for the bloc, Berlin said on Monday.
In light of the region's current treaties, euro area bonds could not be considered a serious option, Chancellor Angela Merkel's spokesman Steffen Seibert said.
Support for common single currency bonds has gained traction both inside and outside Germany as the fiscal crisis has worsened, as they would provide a means of cutting debt costs for lower-rated euro zone states.
Media reports at the weekend suggested Berlin, up to now a strong opponent, was no longer closed to the idea of euro bonds, which would also likely push up Germany's own borrowing costs.
But Seibert told reporters in Berlin: “The German government has said on numerous occasions that it does not believe euro bonds make sense and that's why they will not play any role at tomorrow's meeting.”
Merkel and French President Nicolas Sarkozy meet in Paris on Tuesday after a euro zone summit last month failed to calm markets and left big member states Italy and Spain — and to a lesser degree France — exposed to pressure from frazzled investors.
Sarkozy's office also said euro area bonds were off Tuesday's agenda.
On Monday, the president of Germany's BGA export association became the first senior industry head to back the idea, telling Reuters that all other avenues for fighting the crisis had been exhausted.
Some other euro zone states have also openly urge Germany to back issuing common debt, with Italian Economy Minister Giulio Tremonti declaring his support for the option on Saturday.
Echoing German Finance Minister Wolfgang Schaeuble, a spokesman for his ministry said the main problem with the idea was that common debt instruments would reduce the incentive for overspending states to reign in their budgets and reduce debt.
“We have in Europe on the one hand a common monetary policy, and fiscal policies on the other hand still with national governments,” spokesman Martin Kotthaus told reporters.
“Thus different interest rates are the fundamental instruments to encourage solid budgetary policy with sanctions and rewards. As long as that is the case, euro bonds simply cannot be the choice.”
