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Sarkozy and Merkel call for new EU treaty
BayBak, Azerbaijan | 530 days ago | Monday, 5th December , 2011 , 20:13 [pm] | International
|.|| The leaders of Germany and France have agreed on the need for a new European Union treaty to set out mechanisms for controlling budgets of eurozone members.
After talks in Paris, Angela Merkel and Nicolas Sarkozy said they wanted a new treaty by March which would include automatic punishments for governments that overspend
The leaders of Germany and France have agreed on the need for a new European Union treaty to set out mechanisms for controlling budgets of eurozone members.
After talks in Paris, Angela Merkel and Nicolas Sarkozy said they wanted a new treaty by March which would include automatic punishments for governments that overspend.
Sarkozy said that the new proposals would include a modified EU treaty, ideally for all 27 EU members, but that they were also ready to draw up a treaty for the 17 eurozone members, though this would be open to others.
The two leaders told a news conference that they would ensure “imbalances” that sparked the crisis in the eurozone are not repeated.
“We want to make sure that the imbalances which led to the situation in the eurozone today cannot happen again,” Sarkozy said.
“Therefore we want a new treaty, to make clear to the peoples of Europe, members of Europe and members of the euro zone, that things cannot continue as they are.”
Merkel wants eurozone states to surrender budgetary control to a European authority with veto power, which would require changing the EU treaty.
As announced, France had wanted governments to have control of imposing sanctions on member states who fail to observe budgetary rules.
Al Jazeera’s Jacky Rowland, reporting from the French capital, said that for the first time, after months of dithering, the two leaders spoke in great detail on how they would tackle the crisis.
“What was most remarkable really was the extreme detail that both Sarkozy and Merkel went into when enumerating the points” to be put in a letter which will be presented to the EU president and to individual national leaders for approval, she said.
“We’re used to these meeting ending with vague statements, not specifics. Here we had a whole list.
“I think, really, the key quote was from both … Sarkozy and Merkel where they repeated what has happened must not happen again. Very specifically what happened in Greece must not be allowed to reproduce itself,” she said.
Shares register gains
European shares briefly extended gains and bund futures fell on Monday following Merkel and Sarkozy’s talks.
At 14:43 GMT, the FTSEurofirst 300 index of top European shares was up one per cent at 995.34 points, but had gone
as much as 1.2 per cent higher.
The STOXX Europe 600 Banking Index was up 3.1 per cent.
The Dow Jones, S&P 500 and Nasdaq Composite were up between one per cent and 1.3 per cent in early trading.
German Bund futures, meanwhile, fell to a session low of 134.54 down 97 ticks on the day.
It last stood down 75 ticks on the day at 134.76.
The duo, increasingly dubbed “Merkozy” as they intensify bilateral efforts to restore confidence in the battered eurozone, had held discussions over lunch, their latest attempt to fix a crisis that is threatening trigger a global financial crisis.
Mario Draghi, the chief of the European Central Bank, signalled that a eurozone “fiscal compact” could nudge the bank to act more decisively to fight the crisis.
Analysts cautioned that opposition in other eurozone states to a more intrusive and stringent fiscal regime could yet derail a rescue plan that has eluded eurozone leaders for two years.
Several governments, including Ireland and the Netherlands within the eurozone and the UK within the wider European Union, oppose treaty change for domestic political reasons and fear they would not win public backing in referendums.
David Cameron, the British prime minister, said on Friday that he was not convinced treaty change was needed and that if the EU’s founding charter were reviewed he would ensure the UK’s interests were protected.
On Sunday, as countries continued to battle their debt problems, Mario Monti, Italy’s new prime minister, unveiled a $40bn package of austerity measures – increasing value added tax, reintroducing a property tax and raising the pension age.aljazeera, Voice of a Nation