French economy minister Christine Lagarde said today that European governments could consider the long-term option of issuing joint euro zone bonds only once they had achieved greater fiscal and economic integration.

The idea of the euro zone issuing joint debt - which has been pushed by Eurogroup president Jean-Claude Juncker and Italian finance minister Giulio Tremonti - has been roundly rejected by Germany, which enjoys lower costs for issuing debt than its single currency partners.

Ms Lagarde said talk of joint bonds was for now putting "the cart before the horse".

"If you start putting in place euro bonds, what you do in fact is you dilute the strength, the solidity of some of the members, without having integrated and consolidated fiscally, economically," Ms Lagarde said in an interview with CNBC.

"I think we need to do that first. Then we can think about the euro bonds." Asked if euro bonds were an option in the long term, she replied: "If we have consolidated the foundations."

Part of the process of restoring investors' confidence in the euro zone would be the second round of European bank stress tests, Lagarde said, which would need to be "more credible ... and better communicated" than a first round of tests last year.

Ms Lagarde said she hoped these would be completed in the first half of 2011.

With regard to France's fiscal deficit target of 6.6 per cent of GDP for this year, Ms Lagarde said she regarded it as "an absolute unconditional performance objective". She said the deficit had probably ended 2010 at around 7.7 per cent.

"We have to deliver. There is no option to that ... which means that not only are we going to have to renew those measures which we have taken in 2010 but, if need be, we will take additional measures."

Reuters