Eurobonds will not be a subject for discussion at tomorrow's summit meeting in Paris between German Chancellor Angela Merkel and French President Nicolas Sarkozy, a government spokesman in Berlin said today.

'Eurobonds will play no role in the talks,' Steffen Seibert told a regular news conference.

The Elysee Palace in France also later confirmed that bonds would not be discussed.

Sarkozy is due to host his counterpart Chancellor Angela Merkel in Paris as he struggles to chip away at German resistance to increased European financial governance.

Between them, Merkel and Sarkozy lead the 17-nation euro zone's biggest economies, and markets will be watching anxiously to see whether they can boost lender confidence amid an unprecedented sovereign debt crisis.

Last week, European stock markets saw their worst losses since 2008, amid rumours that France might lose its Triple A credit rating, but Berlin remains opposed to deep reforms of the European financial system.

Sarkozy has been pushing for governments to turn the debt crisis into an opportunity to forge a more centralised system of controls across the zone, better able in Paris' eyes to protect against future meltdowns.

But Merkel - and German voters - oppose any change that might create what they have dubbed a 'transfer union', in which Germany's powerful export-led economy effectively underwrites its underperforming euro zone partners.

Such a system would make it easier for struggling members like Greece or Portugal to finance their massive public deficits, but would also inevitably transfer some of the cost of servicing these debts to German taxpayers.

Until last week, France was seen as among the better performing euro zone economies, even if still lagging behind its German neighbour - but rumours, angrily denied, about the health of its banks rocked the market.

Sarkozy was forced to abandon his summer holiday at a Riviera villa and fly back to Paris to propose tougher austerity measures, while Merkel remained calmly in Italy.

French officials say he still intends to press for an 'acceleration' of reforms to Europe's financial institutions and hopes he and Merkel will agree 'common positions on the reform of the governance of the euro zone'.

He will also push for a quicker application of decisions made last month, when European leaders found another €159 billion for Greece and broadened the scope of their rescue fund to allow it to buy government bonds.

But, over the weekend, German officials were quick to head off any talk of broader reform - rejecting both the idea of issuing joint eurobonds or of further expanding the €440 billion European Stability Fund.

Merkel and Sarkozy are to meet in Paris in the afternoon, then hold a press conference before sharing a working dinner. Afterwards, they will make recommendations to European Union President Herman Van Rompuy.

Sarkozy will meet his own cabinet on Wednesday and next week, on August 24, he is due to unveil a new round of severe austerity measures designed to bring France's budget deficit down to less than 3% of its GDP by 2013.

German ministers repeat Eurobond opposition

Two leading German ministers reiterated their opposition to issuing jointly guaranteed European sovereign bonds as a means to end the crippling debt crisis.

Finance Minister Wolfgang Schaeuble told German news magazine Der Spiegel that eurobonds are out of the question as long as the currency zone's 17 nations still run their own fiscal policy, and that different interest rates for euro zone nations were needed to provide 'incentives and the possibility of sanctions to enforce solid financial policy.'

Schaeuble acknowledged that the EU must, and will, beef up its response to the crisis to assist the heavily indebted nations, but that 'there won't be a collectivisation of debt or unlimited assistance.'

Chancellor Angela Merkel has long ruled out eurobonds, and Economy Minister Philipp Roesler joined the chorus today, describing jointly guaranteed debt as 'the wrong way' out of the crisis.

'Eurobonds would mean that everybody shares the same interest burden which would be a punishment for financially sound nations,' he was quoted as saying. 'We cannot want this for Germany and for all other good states,' he added.

Eurobonds would be a major step toward the bloc's economic integration, and are billed by supporters as an overnight solution to the crisis. Italy, Belgium and Luxembourg are among the nations calling for eurobonds.

Merkel's spokesman Steffen Seibert said that Merkel and Sarkozy will discuss strengthening financial and economic cooperation and governance across the euro zone.

'This is one of the lessons from the euro crisis, we need a stronger economic cooperation across the euro zone,' he added, declining to specify which concrete proposals will be discussed at the meeting.

The principle behind eurobonds is that European countries would guarantee each other's debts, so that investors would see the bonds as super-safe and loan at low interest rates. The hope is that lower borrowing costs would prevent any more financial bailouts.

But Germany as the most creditworthy European country fears it would face higher borrowing costs and more risks if it had to borrow jointly with financially shaky nations.

Eurobonds could drive down the borrowing costs for troubled euro zone countries immediately, but Germany maintains that cheap credit without a powerful European institution overseeing the member states' budget and fiscal policy cannot be a solution.

Big three won't need bail-out - Rehn

Spain, Italy and France will not need support from the euro zone's rescue fund, EU Monetary Affairs Commission Olli Rehn said in an interview with Germany's Bild newspaper today.

'We don't expect that these countries will need help from the stability mechanism,' he said.

'They are taking the right measures themselves to get their budgets and economies in order. That is the way to restore and strengthen market confidence,' he added.

Rehn also told Bild that he also expects euro zone countries to quickly agree - by September at the latest - to widen the scope of the European Financial Stability Fund (EFSF) that was agreed by EU leaders at a July 21 summit. Some German lawmakers have warned that this is overly ambitious.

'The parliamentary procedures are different everywhere,' Rehn said. 'In some countries a ratification is required but in others it's not. But we've got to quickly enact the measures agreed at the July 21 summit - at the latest in September - to put an end to the uncertainties.'

The German government - along with governments in Austria, Finland, the Netherlands and Slovakia - have said they are confident their parliaments will approve the July 21 deal by euro zone leaders to widen the scope of the €440 billion EFSF.

Most legislatures are on summer holidays until next month and governments have chosen not to recall them.