Italian Prime Minister Mario Monti will on Friday
host a four-way summit in Rome with German Chancellor Angela Merkel,
French President Francois Hollande and Spanish Prime Minister Mariano
Rajoy. Here is what each of them has proposed to solve the eurozone
MERKEL: Germany has resisted calls to take on more of the burden from stricken eurozone peers, either through the issuance of common sovereign debt - so-called eurobonds - or via a banking union that would see participants underwrite each others' lenders and accept centralized supervision.
Merkel has instead presented structural reforms and deficit reductions as the best solution to nurse troubled economies back to health - pointing to Germany's transformation from the sick man of Europe to the continent's powerhouse over the last decade.
Her government has presented eurobonds and other forms of eurozone risk sharing as a long-term option that can only happen if it is matched by a profound reform of EU institutions that would introduce a "political union."
In Merkel's view, EU authorities should be given the democratic mandate and the power to police national behaviour to prevent the reckless policies that landed Greece and others in trouble. That would entail significant losses of national sovereignty.
HOLLANDE: The new French leader set himself on a collision course with Merkel by championing eurobonds and two other ideas unpopular with Berlin: pushing the European Central Bank (ECB) to do more to promote growth - possibly by changing its legal mandate - and expanding eurozone rescue funds by letting them borrow from the ECB.
But in a concession to Germany, he accepts that more solidarity between eurozone members first requires closer economic and political integration. In his proposal for a 120-billion-euro (151-billion-dollar) Growth Pact, Hollande called for a 10-year roadmap toward that objective.
Hollande's Socialists are less resistant to a federal Europe than former president Nicolas Sarkozy's Gaullists, but given the rise in France of anti-EU parties such as Marine Le Pen's National Front, he has to tread carefully.
Paris sees eye-to-eye with Berlin on a financial transaction tax, and supports measures in the pipeline for the next EU summit on June 28-29: increasing the capital of the European Investment Bank and creating EU project bonds to finance infrastructure spending.
MONTI: The Italian leader has expressed sympathy for Merkel's insistence on the need for weaker eurozone economies to reform themselves, rather than count on help from stronger peers, but has also emerged as a supporter of Hollande's pro-growth agenda.
This week, his government suggested using eurozone rescue funds to reduce the borrowing costs of vulnerable eurozone members by buying their bonds whenever their yields reach dangerously high levels - an idea that would benefit Italy and Spain.
Italy has proposed a so-called "golden rule" that would give cash-strapped countries margins to invest on infrastructure and other growth-generating sectors by excluding such spending from deficit calculations.
A former EU commissioner for market regulation and competition, Monti has also suggested Brussels be given more powers to open up national markets - a request that is thought to be aimed at Germany's heavily regulated energy and transport sectors.
RAJOY: Faced with record-high borrowing costs, the Spanish government has ratcheted up pressure on the ECB to reinstate its bond-buying programme, which last year was instrumental in driving down Spanish bond yields.
Madrid has also called for eurobonds and collective guarantees on bank deposits as part of a European banking union, just as his government is applying for a eurozone loan of up to 100 billion euros to shore up its lenders.
So far, Spain has not been successful in demanding that loans be given directly to the banks to avoid increasing government debt. The demand might be renegotiated, the European Commission hinted this week.
Rajoy has insisted that his demand for "more Europe" on all these matters would benefit the entire bloc and not just Spain.
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