Angela Merkel: Germany cannot save the euro on its own The G20 summit meets in the Pacific coastal resort of Los Cabos the day after Greece votes in June 17 elections that could lead to the highly indebted country leaving the euro and defaulting on €240bn (£194.8bn) in EU and IMF loans. A Spanish bank bailout, using EU funds, of up to €100bn to rescue its banks was announced last weekend in a bid to insulate the eurozone against financial contagion from the political chaos that is expected to follow the Greek vote. But markets have rejected the Spanish bailout, pushing the cost of Spanish borrowing to euro-era highs and threatening to take the EU single currency's debt crisis into a dangerous new phase. Germany regards the Spanish bailout as being too late, after Spain resisted strict German conditions on the loan for months, and as another ill thought out "quick fix" that has made the eurozone's crisis even worse. Mrs Merkel is personally angry after being assured by the European Central Bank that massive "LTRO" liquidity operations early this year, cheap bank loans worth over €1 trillion, would prevent a new banking crisis for three years. "She was reluctantly convinced that the effect of the liquidity operations would last for years but it lasted six months before being absorbed into failed or failing banks," said a senior European official. German finance officials note that since 2010 various eurozone counter crisis measures - including LTRO and bailouts - have seen "risk mutualisation" of €2 trillion in debt, with Germany liable for the lion's share. The German government was aghast last month when PIMCO, a leading investment house, announced that it had stopped buying Germany's sovereign bonds because it was concerned over the burden of its eurozone obligations. Mrs Merkel has flatly ruled out calls by Francois Hollande, the French President and Mario Monti, the Italian Prime Minister, for Germany to underwrite joint euro-area debt. "All resources, all measures, all packages will end up being smoke and mirrors if it becomes clear in the end that they extend beyond Germany's capacity," she said. The Chancellor has told the French and Italian leaders that they are "out their minds" to suggest that Germany shares their debts without either France or Italy surrendering sovereignty to the EU. Germany's "precondition" for any form of debt sharing is that France and Italy are forced to pay back 20pc of all debt over 60pc of national GDP every year, a requirement blocked by a Paris veto earlier this year. "It's our obligation today to do what has been neglected, to break the vicious circle of generating ever more debt and breaking the rules," said Mrs Merkel.