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Germany and France are ruling out common eurozone bonds to solve the bloc's current debt crisis, in spite of renewed pressure ahead of a meeting of chancellor Angela Merkel and president Nicholas Sarkozy on Tuesday. Wolfgang Schauble, German finance minister, made clear in an interview with Der Spiegel, that Berlin remains opposed to such a policy. Senior French officials also played down speculation that any firm announcement on jointly issued bonds would be issued after meetings when Ms Merkel comes to Paris on Tuesday. The comments come after Giulio Tremonti, Italy's finance minister, this weekend described jointly issued bonds that would lower some struggling states' borrowing costs as a "master solution" to the eurozone debt crisis. Yet Ms Merkel and Mr Sarkozy are on Tuesday expected to reiterate the need for greater fiscal and economic co-operation before any European bond can be considered. Nonetheless they hope to reassure markets by flagging a common determination to implement the measures agreed at the last Eurozone summit on July 21 where members agreed a new round of emergency crisis measures. Failing to do this will put even further pressure on Euro and will undermine its strength in the coming weeks.
EUR/GBP: Investors are betting on pound weakness
Britain's allure as a haven is crumbling as global investors desert sterling amid the lowest inflation-adjusted bond yields on record and a faltering economy. Amid a background of rioting and looting across the nation, Chancellor of the Exchequer George Osborne said last week that the U.K.'s recovery will "take longer and be harder" and Bank of England Governor Mervyn King signaled a day earlier he may resume pumping cash into the economy to boost growth. Investors have responded to the worsening outlook by pulling money out of the country at the fastest rate in at least two decades. They are betting on pound weakness even as the euro-area debt crisis deepens because of slumping consumer sentiment and a growth rate that may trail behind Germany's by more than two percentage points in 2011.