Euro Sinks Further Amid Search for Solution to Crisis PARIS - The euro continued to tick lower Thursday, after European Union leaders failed to agree on any new steps to escape the trap of stagnant economic growth and wobbly government finances that has put the currency's future into doubt. Leaders of all 27 E.U. member nations gathered Wednesday evening in Brussels for what was described as an "informal dinner," with all eyes on the simmering crisis in Greece. The French president, François Hollande, sought to move the consensus away from the rigid austerity orthodoxy favored by Germany and its allies, and toward measures to stimulate growth. Mr. Hollande called on the 17 euro nations to jointly issue euro bonds to guarantee the finances of struggling nations, an idea that met with a chilly reception from Germany. "We had a not unheated discussion on euro bonds," Bloomberg News quoted Jean-Claude Juncker, the prime minister of Luxembourg, as telling reporters in Brussels early Thursday. The idea, he said, "didn't find much support, particularly in the German speaking area but found a certain enthusiasm in the French speaking area." The German economy minister, Philipp Rösler, drove the point home Thursday in Paris, Reuters reported, saying: "We believe that euro bonds are the wrong tool to stabilize Europe because it would take away the pressure for reform in our partner countries and it would also undermine market discipline." James Nixon, an economist with Société Générale in London, said Europe's drawn-out search for a way out of the crisis "is extracting a very high price in terms of the economy, as well as feeding back into the problems of the banking sector. It's just making this whole problem bigger. Economic reports Thursday appeared to bear that out and served as a reminder of the difficulty of the task faced by European leaders as they try to shrink budget deficits in a weak economic environment; if recession sets in and gross domestic product declines, then by definition deficits will grow as a percentage of G.D.P. A Markit Economics index that tracks Europe's services and manufacturing sectors fell in May to 45.9 from 46.7, worse than economists surveyed by Reuters and Bloomberg had expected. An index reading below 50 suggests the economy is contracting, consistent with expectations that the euro zone economy is now on the verge of shrinking after first-quarter growth of just 0.1 percent. Perhaps even more worryingly, German data released Thursday showed signs of a slowdown in an economy that until now one of the main bright spots on the Continent. A Markit index based on surveys of purchasing managers of German manufacturing companies fell to 45.0 in May from 46.2 in April. A separate report from the Ifo Institute, based on surveys of German companies, showed companies expressing "greater pessimism about their business outlook," and noted that the "recent surge in uncertainty in the euro zone is impacting the German economy." Mr. Nixon said fears of a Greek exit from the euro were probably overblown, and that the situation - which has already proved "remarkably durable" - could continue to fester for some time, even after the June 17 election that could create a government that would repudiate the bailout terms that European leaders have insisted on. "I can imagine a world where the Greeks want to stay in the euro but don't want to follow the bailout measures," he said. In that case, the legal obstacles faced by the other euro zone members in trying to force Greece to leave the euro, as well as the Greeks" desire to remain in, could result in a situation where the Greek state pays its bills in I.O.U.s, effectively creating a parallel currency alongside the euro. "I don't think there's an imminent Armageddon," Mr. Nixon said. So the euro crisis will probably go on and on. But Jennifer McKeown, an economist in London at Capital Economics, wrote in a research note that the data suggested the growing economic weakness was outpacing the response from policymakers. "A deepening and spreading economic downturn will further reduce the currency union's chances of survival and looks set to put more downward pressure on the euro exchange rate," she wrote. In morning trading in Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 0.7 percent, while the FTSE 100 index in London gained 0.8 percent. U.S. index futures were marginally lower, suggesting that Wall Street stocks would open with a modest downward bias. The Standard & Poor's 500-stock index bounced back from early losses on Wednesday to close with a gain of almost 0.2 percent. The euro fell to $1.2572 from $1.2582 late Wednesday in New York, while the British pound fell to $1.5682 from $1.5692. The dollar rose to 0.9553 Swiss francs from 0.9546 francs. But the dollar fell to 79.43 yen from 79.47 yen. The Tokyo benchmark Nikkei 225 stock average gained about 0.1 percent. The Sydney market index S.&P./ASX 200 fell 0.3 percent. In Hong Kong, the Hang Seng index fell 0.7 percent. The bond market continued to show signs of stress, with the yield on Germany's 30-year bonds falling at one point to a record low, and the yields of Spanish and Italian bonds edging higher.