He appears to have two key things in mind: first, that the Germans should drop their opposition to the European Central Bank directly engaging in even larger purchases of Italian debt than the tens of billions it has already purchased; and second that the Germans should support a significantly larger European Financial Stability Facility — perhaps of €2-3trillion.
Cameron has been joined in this position explicitly by the Americans (e.g. Tim Geithner), apparently by the European Commission, and at least in private by the French (though Sarkozy is supposed to have essentially told Cameron to mind his own business).
All such schemes — Eurobonds, a huge EFSF, mass ECB purchases of Italian and Spanish debt — all amount to the same thing, namely that the Germans should guarantee trillions in debts from other countries, accumulated before the euro even existed. I find the Cameron/Geithner view that this is a good solution to the euro crisis extraordinarily intellectually lazy. Of course it would be a “solution”, in the short-term, if the Germans paid off all the debts that others have accumulated across Europe. Indeed, why stop there? Why not get the Germans to pay all the debts of American households as well? We can chuck in the debts of the Chinese middle classes, whilst we’re about it. Then we’d “solve” the US and Chinese financial crises as well as the Eurozone one. Alternatively, perhaps we could “solve” the Eurozone crisis by getting the Americans to guarantee all the debts of Italy, Portugal, Spain, France and Ireland? Would Geithner be keen on that “solution”?