The French President, Nicolas Sarkozy, has defended the Chancellor, Angela Merkel, against criticisms by some of their European partners and joined her in rejecting a proposal to introduce a common government bond for the euro zone nations.
"There is no need to introduce a euro bond at present," Sarkozy said after a one-day Franco-German Cabinet-level meeting in Freiburg.
Euro protects bloc in current crisis - France
Instead, the economic and monetary policies of the European Union must be further strengthened to safeguard the stability of their common currency, he said.
Merkel was sharply criticised by the Luxembourg Prime Minister and Chairman of the euro group, Jean-Claude Juncker, earlier this week for rejecting his call for a joint government bond of the euro zone nations to ease the debt burden on some of their heavily-indebted partners.
His proposal came in the wake of a surge in the borrowing costs of debt-laden countries such as Portugal and Spain as speculators began targeting them as next in line for a bailout.
A euro bond will enable all nations to borrow from the financial markets at around 3 per cent interest rate which Germany currently pays, he said.
Ireland's borrowing costs are still very high at around 8.3 per cent while Greece, which was bailed out by the euro zone nations and the International Monetary Fund (IMF) in May, has to pay up to 11.9 per cent, Juncker said.
The looming threat to Ireland's debt crisis spreading to some of the other heavily indebted countries after last month's €85-billion ($112 billion) bailout was high on the agenda of the meeting, which was attended by several cabinet ministers from both s ides.
It also intended to prepare for next week's summit of the heads of state and government of the 27-nation EU.