Francois Hollande will push EU leaders on eurobonds

NEWLY-elected French president François Hollande will use Wednesday’s informal meeting of European Union leaders to outline proposals for eurobonds, in an effort to reassure financial markets on the outlook for the eurozone.

Europe’s stock markets are bracing themselves for further turbulence this morning following heavy falls last week as Greece failed to form a government, triggering another election.

Hollande is expected to put pressure on German chancellor Angela Merkel to remove her opposition to introducing eurozone bonds, which would be issued for the whole of the single currency area. In effect it would use the financial strength of Germany to support borrowing for weaker economies.

Speaking after the weekend G8 world leaders’ meeting at Camp David in the United States, Hollande said: “I will outline all growth proposals at this informal meeting.

“Within this packet of proposals there will be eurobonds and I will not be alone in proposing them. I had confirmation on this at the G8.”

Wednesday’s meeting in Brussels is expected to focus on the French president’s call for measures to kick-start growth across the EU – and in the eurozone in particular – while continuing to cut budget deficits.

Dominic Rossi, global chief investment officer for equities at Fidelity Worldwide Investment, said: “It looks inevitable that Greece will leave the euro. It is clear Greece does not have the mandate of its people to implement austerity.”