German Chancellor Angela Merkel and French President Nicolas Sarkozy have urged European Commission President Jose Manuel Barroso to consider an EU-wide ban on short selling of shares and state bonds.

In a letter published by the German government on June 9, the pair said the Commission should step up efforts to introduce tougher controls for credit default swaps on sovereign bonds and short selling, and present measures in the next few weeks.

“In particular we think it’s imperative to improve the transparency of short selling positions on shares and bonds, particularly sovereign bonds,” the two said.

“The work of the European Commission should also extend to the possibility of an EU-wide ban of naked short-selling of all or certain shares and sovereign bonds as well as all or certain naked CDS on sovereign bonds,” they added.