B y AGENCIESANGELA Merkel and François Hollande pledged on Friday "to do everything to protect" the European Union's single currency, papering over deep divisions between them over how to tackle the Spanish and Italian debt crisis.
The German chancellor and French president issued a joint statement following a crisis telephone call echoing Mario Draghi's promise on Thursday that the European Central Bank would do whatever it took to save the euro.
"France and Germany are fundamentally tied to the integrity of the euro area," they said in the statement.
"They are determined to do everything to protect it.
"Member states, like the European institutions, must fulfil their obligations to this end according to their prerogatives."
Markets rose on Friday afternoon as the Franco-German signal was interpreted as giving a green light for ECB to resume buying Italian and Spanish bonds.
The call for European institutions to act is backed up by a promise of "rapid implementation" of a controversial EU summit decision last month to use euro bail-out funds to help banks and to insure Spanish or Italian bonds.
Germany has unsettled the markets and angered France and Spain over the past two weeks by showing reluctance to implement the decision because of strong domestic opposition to the eurozone directly assuming debts run up by national banks or governments.
In an acknowledgement of the growing backlash over the rising costs of saving the euro, Germany's powerful Bundesbank warned the ECB on Friday not to "blur the line between monetary and fiscal policy" by intervening on bond markets to bring down the cost of Spanish and Italian borrowing next week.
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