Arriving at the EU?s 19th eurozone crisis summit in the last two years, the French president opened hostilities with Germany by declaring himself to be on the side of Italy and Spain.
?I have come here to get very rapid solutions to support countries in the greatest difficulty on the markets even though they have made considerable efforts to restore their public finances,? said the French leader.
The rift between eurozone members widened when Mark Rutte, the Dutch prime minister, supported Germany. He said the only way Spain and Italy could emerge from the crisis was ?to bite the bullet? and to ?reform their labour markets, to make savings and reforms?.
Both Spain and Italy are vetoing any decisions until the eurozone shows them ?solidarity? because they have implemented EU austerity measures, but have still seen substantial increases in the cost of their government borrowing on the bond markets. On Thursday, Spanish bond yields passed the critical 7pc mark again.
EU officials have confirmed that the two countries had demanded the use of eurozone bail-out funds, worth ?740bn (?593bn), to buy new Spanish and Italian bonds to ease borrowing costs at debt auctions over the summer.
The moves have run into opposition from Germany ahead of a vote in the Bundestag parliament today, where Mrs Merkel requires a two-thirds majority of MPs to ratify the creation of a permanent eurozone bail-out fund.
In order to prevent a parliamentary rebellion over the new fund, which means an extra contribution of ?168bn from German taxpayers, Mrs Merkel insists that help for Italy or Spain be attached to strict conditions, seen as politically toxic in both Rome and Madrid.
The temperature of the debate was raised after a senior German official close to the chancellor poured scorn on the demands being made by the Italian and Spanish.
?We would warn against exaggerated scaremongering,? said the official.
Mario Monti, Italy?s technocrat prime minister, is demanding help to bring down borrowing costs currently at 6pc, near crisis point, in return for pushing through controversial pension and labour reforms.
Unless he can show progress, Mr Monti, could face a rebellion in the Italian parliament, tipping Italy into political turmoil that would deepen its borrowing problems, plunging the eurozone into its worst crisis yet.
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