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European shares rise ahead of summit

Friday, December 02, 2011 - 02:11

Dec. 2 - European shares gain on hopes of a comprehensive solution to the euro zone crisis at next week's EU summit, but German Chancellor Angela Merkel says a resolution will take years. Kirsty Basset reports.

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Hopes are high ahead of an EU summit next week, seen as make or break for the euro zone. European shares continued to rally on Friday, and looked headed towards posting their biggest weekly gains since the beginning of the 2008 financial crisis. Ten year German government debt outperformed U.S and British debt - and yields on Italian and Spanish debt fell further on hopes there will be a breakthrough. Robert Halver is from Baader Bank. (SOUNDBITE) (English) ROBERT HALVER FROM BAADER BANK, SAYING: "Next week we'll have a very important week. First of all we'll have the EU summit, definitely, it's very important because we still need very long lasting solutions." But German Chancellor Angela Merkel tried to dampen expectations. (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "There are no easy and fast solutions, especially not, as some people insist on saying ahead of every summit, the apparent one last push. That is neither my kind of language nor my way of thinking. (applause - with camera pan over parliament) The resolution of the euro crisis is a process. And this process will take years." She ruled out the possibility of the European Central Bank printing money like the Bank of England or U.S. Fed - and also the introduction of eurobonds, saying they would breach Germany's constitution. But she is calling for greater European powers to control national budgets, and tougher punishments for countries that run up large deficits. (SOUNDBITE) (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "We are going to Brussels with the goal, and I want to emphasise this, to bring about treaty changes, and in the spirit that we want to avoid creating a wedge between Euro countries and non-Euro countries." In Paris, French President Nicolas Sarkozy met with British Prime Minister David Cameron, to discuss plans for tougher euro zone governance - and soothe fears about the potential impact on British influence. Sarkozy will then meet with Merkel on Monday, ahead of next Friday's summit. Kirsty Basset, Reuters.