Germany Rejects Euro Bonds After Failed Auction ‘Wake-Up Call’

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Source: Bloomberg News

German Economy Minister Philipp Roesler rejected calls for Chancellor Angela Merkel to back joint euro-area borrowing and an expanded role for the European Central Bank in fighting the debt crisis.

Newspaper editorials, analysts and opposition politicians stepped up bids for Merkel to shift from an incremental approach after the government sold a fraction of the bonds it auctioned yesterday.

“As the crisis deepens with yesterday’s bond auction, the veil has been torn off Merkel’s policy of muddling through,” Sebastian Dullien, a senior fellow at the European Council on Foreign Relations in Berlin, said in a telephone interview. “It’s only got us closer to the end-game, either the breakup of the euro or euro bonds. The strategy has failed.”

Merkel has so far backed a focus on debt reduction and closer economic coordination, calling for a revision in European Union treaties that threaten to bog down in a multiyear negotiation, as core euro economies risk succumbing to the contagion that began in Greece in 2009.

Read more: http://www.bloomberg.com/news/2011-11-24/germany-rejects-euro-bonds-after-failed-auction-wake-up-call-.html

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The plot , like the gravy , thickens.