Berlin and Paris are calling for joint European economic governance. Chancellor Angela Merkel and President Nicolas Sarkozy intend to present concrete proposals as to the form this could take to the President of the European Council Herman van Rompuy.
As announced at the EU Council meeting four weeks ago, Germany and France are now to present proposals as to how to better coordinate the economic policy of the euro-zone states, and thus the competitiveness of the euro zone. Angela Merkel and Nicolas Sarkozy intend to dovetail the euro-zone states’ financial and economic policy more closely, thus strengthening the common currency.
The euro will not rebound without some serious effort though. "The member states of the euro zone will have to ensure more rigorous compliance with the terms of the Stability and Growth Pact,” underscored the Chancellor, speaking after a meeting in Paris. All member states should, for instance, undertake to respond appropriately to any criticism of their budget planning voiced by the European Commission.
The community is to have a greater say in issues pertaining to the competitiveness of individual partners too. When governments work resolutely to restore economic stability, funds from the EU Structural Funds are to be used to support them in specific ways.
New phase of cooperation
"We aim to win the trust of the markets by acting,” declared the Chancellor. Step by step. The debt crisis has a long history and this is not a situation that can be resolved overnight.
Angela Merkel and Nicolas Sarkozy would like to see the current President of the European Council, Herman van Rompuy, in charge of the new European economic governance.
Ceiling on new borrowing like Germany’s
Like Germany, France too now intends to introduce a constitutional ceiling on new borrowing for public budgets. This is to be an example for all other euro-zone states.
By 2013, the finance and economics ministers of the two countries are to draw up proposals for a joint business tax. At international level, the two governments aim to push ahead with efforts to introduce a financial transactions tax.
Shared business, shared success
"The euro is the foundation on which our prosperity and our future are built,” declared the Chancellor, reaffirming her commitment to the joint currency.
The controversial eurobonds, bonds that would be issued jointly by all euro-zone states, are not helpful in this context, declared Angela Merkel and Nicolas Sarkozy. If such bonds were to be issued at all, it would only be appropriate at the end of a period of successful economic integration of all partners, noted the French President. Now each state must firstly ensure discipline and balance their budgets, while building a joint economic policy.