Spanish Prime Minister Mariano Rajoy ratcheted up pressure on German Chancellor Angela Merkel to back new ideas for a resolution of the debt crisis as he urged European leaders to bolster efforts to protect banks. With markets bracing for further deterioration in Spain's finance sector and a possible Greek departure from the 17-member euro area, Rajoy on June 2 added his voice to calls for a more robust “banking union" in Europe, lending his support for a centralized system to re-capitalize lenders. On the same day, Merkel toughened her opposition to euro-area debt sharing, telling members of her party in Berlin that “under no circumstances" would she agree to German-backed euro bonds “We need to do whatever we can to convince Germany to show leadership and preserve the European Union as the fantastic object that it used to be," billionaire investor George Soros said in June 2 remarks in Trento, Italy. “The future of Europe depends on it." As euro-area unemployment reached its highest level on record, manufacturing output contracted for a 10th straight month in May and the currency plunged close to a two-year low against the U.S. dollar, leaders continued to wrangle over the details of support for the currency bloc. President Barack Obama meanwhile laid the blame for sluggish U.S. employment at the feet of euro-area leaders, saying they haven't done enough to resolve the crisis, now in its third year, Bloomberg reported.
