Debt sharing would be economically wrong, says Merkel

German chancellor Angela Merkel yesterday dashed any lingering hope in financial markets that Europe would issue common eurozone bonds to underpin its single currency after Spain formally sought a financial rescue.

The Spanish government applied for bailout loans to recapitalise banks laden with bad debts as the euro and shares fell due to investors’ scepticism that a two-day EU summit starting on Thursday will act decisively on the debt crisis.

Ms Merkel, who leads Europe’s biggest economy and the main contributor to its rescue funds, said sharing debt liability within the 17-nation eurozone would be “economically wrong and counterproductive”.