Business

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




Where will 2016 sit in July Carnival history?

Hong Kong based owner Patrick Fu and his son bring back Ramornie Handicap winner Smart Volatility back to scale.

We look back at the big moments of the 2016 July Racing Carnival

NSW economy not so good according to business survey

A recent survey reveals businesses in the Northern Rivers are less optimistic on the current state of the NSW economy than earlier this year.

Survey shows Northern Rivers businesses less confident.

Latest deals and offers

Superheroes of the big screen enjoy sounds of Splendour

CHRIS Hemsworth and his Avengers mates drop by Byron festival.

Indigenous artist shows tourists secrets of Aboriginal painting

Ever thought "I could do that" about Aboriginal art?

Dynamic pics from Splendour Day 1

The Strokes perform at Splendour in the Grass 2016. Photo Marc Stapelberg / The Northern Star

Check out the latest pictures from Splendour in the Grass.

Bindi Irwin: 18 magic photos to mark her 18th birthday

Bindi Irwin with a python.

Photos: Bindi Irwin from babyhood to 18

Aussie director makes his mark on new Roots mini-series

Malachi Kirby as Kunta Kinte in a scene from the TV series Roots.

BRUCE Beresford behind final episode of remake of iconic series.

Wham bam, thank you TAM

Regional TAM is increasing its audience measurement services by 50%.

Regional television viewers finally getting the credit we deserve

You can own this Queensland town for just $1

Yelarbon

Unprecedented auction of town's business centre with no reserve

Work starts on $15M Caloundra apartment building

Turning the first sod at the Aqua View Apartments site in Kings Beach are (from left) husband-and-wife developers Alex Yuan and Stella Sun with construction company Tomkins director Mike Tomkins and Councillor Tim Dwyer.

Developers excited about addition to Kings Beach skyline

Plans revealed for 1500-lot 'master-planned community'

Precinct will be bounded by Boundary St and Shoesmith Rd

Ecco Ripley sales run sparks prime release

MOVING IN: Sekisui House has announced the release of more residential blocks at Ecco Ripley.

Sekisui House is preparing to unveil more land at Ecco Ripley

Massive residential 9-storey high-rise hit by delays

An artist’s impression of the eight-storey-high apartment complex that Bernoth Holdings wants to build in South Toowoomba, next to the City Golf Club.

Developer struggles to get approved high-rise development started