Cracks forming in Eurozone front

"We want a strong, stable euro ... we will do everything to defend it," Ms Merkel said after the Strasbourg meeting at which the French and German leaders met with new Italian Prime Minister Mario Monti for the first time.
"We want a strong, stable euro ... we will do everything to defend it," Ms Merkel said after the Strasbourg meeting at which the French and German leaders met with new Italian Prime Minister Mario Monti for the first time. (c) Deutscher Bundestag / Lichtblick/Achim Melde

THE Eurozone's three biggest economies sought to present a united front in their struggle to save the single currency yesterday, but failed to conceal key differences over the European Central Bank's role in fighting the debt crisis.

President Nicolas Sarkozy of France said that he and German Chancellor Angela Merkel would be proposing changes to key EU treaties to allow deeper European integration. All three countries said they would do what it takes to save the euro.

"We want a strong, stable euro ... we will do everything to defend it," Ms Merkel said after the Strasbourg meeting at which the French and German leaders met with new Italian Prime Minister Mario Monti for the first time.

Despite most concern being focused so far on Italian debt, signs have emerged this week that even Germany and France - the Eurozone's two biggest economies - are not immune from the crisis that has already seen smaller eurozone countries bailed out.

Yesterday it appeared that German arm-twisting was necessary before Mr Sarkozy would emphasise the need for new EU treaties to rescue the Eurozone, as opposed to calling in the ECB in an emergency move to buy up debt.

Mr Sarkozy said that "propositions for the modification of treaties", designed to impose greater fiscal discipline, would be presented in the coming days - in time for the next EU leaders' summit on December 9.

Britain expects a "limited treaty change" that will affect only the 17 eurozone countries, a move which would reduce the pressure on the UK Government from Conservative MPs to put the issue to a referendum.

British officials say agreement on the detail may not be reached until next year. David Cameron will argue at the summit that the change must not undermine the single market or allow the 17 to form a "caucus" that takes crucial decisions affecting the 27-strong EU, relegating Britain and the other nine nations not in the euro to a second division.

Some EU countries fear that treaty changes will take too long and might prove politically difficult to enact.

Luxembourg's foreign minister, Jean Asselborn, said in an open letter to Ms Merkel: "If you, dear Chancellor, get your wish ... please do not forget the risk that the EU could implode. Do I need to remind you that Spain and Luxembourg were the only countries in 2005 to vote 'yes' to the EU's constitutional treaty?"

At the Strasbourg meeting Mr Monti briefed his French and German counterparts on new Italian reforms aimed at slashing debt. The markets, however, remained unimpressed by the show of unity. French stocks fell after the meeting, and Italy's bond yields surged back past the unsustainable 7 per cent threshold.

Topics:  eurozone, sovereign debt crisis



Local Real Estate

finda logo
Featured Real Estate
Make An Offer - Owner... $339,000
House 3 2 2
Investment Unit... $199,000
Unit 2 1 1
Best Value Brick Buy in... $275,000
House 4 2 2
Affordable Level... $147,500
Residential Land 0 0

Featured Jobs

finda logo

Clarence Valley jobs listed daily

Featured Jobs
GENERAL MANAGER ... Gladstone Full Time $120 - $150
Bus Driver Port Macquarie Full Time
Bus Driver Port Macquarie Bc


Local Partners

LATEST DEALS AND OFFERS

Job Listings

Search for your next job now.
Learn More

Cars For Sale

Find cars for sale online now.
Learn More

Property Listings

Search for a property online right now.
Learn More

Local Profile

Stay Connected

Get the news as it happens, in your inbox

You can change the newsletters you are subscribed to when you edit your profile

Edit Profile


Special Offers

Latest deals and offers

View today's ePaper!

Read the digital edition
Learn More

Horoscopes

Virgo

If you have been trying to kick an old habit, your resolve will be much stronger now. Overcoming this problem will also put more cash in your...

read more

Marketplace

Special Offers & Promotions

Compare & Save