France, Germany propose "a true economic government for the eurozone"
17. August 2011. | 09:42 09:57
President Nicolas Sarkozy and Chancellor Angela Merkel have reaffirmed their determination to implement in full the resolutions reached by the heads of state and government of the euro-zone states and by the institutions of the European Union on 21 July 2011. The proposals of French President Nicolas Sarkozy and German Chancellor Angela Merkel included a common economic government, a financial transaction tax on EU level and the "golden rule" to reduce members' deficit.
France and Germany proposed more united regulation on financial market to guarantee growth during a bilateral summit Tuesday at the Elysee Palace, amid fears of worsening eurozone debt crisis and slowing economic growth in both states.
The proposals of French President Nicolas Sarkozy and German Chancellor Angela Merkel included a common economic government, a financial transaction tax on EU level and the "golden rule" to reduce members' deficit, according to a joint press conference after their two-hour meeting.
Both leaders underlined their determination to fight for the stability of the eurozone and fight against the debt crisis and prioritized the necessity for all 17 eurozone members to form a closer unity in terms of financial and economic policy.
They called for a common economic government within the eurozone led by European Union President Herman Van Rompuy and set to incorporate discussion over a tax on financial transaction into next Eurpean session in September.
In addition, the two leaders also called eurozone peers to adopt the "golden rule", approved in Germany and considered in France, in a bid to reduce worrying deficit and public debts.
Germany has approved the "golden rule," a fiscal policy guideline that imposes strict censorship to public spending and helps better control budget increase. Discussion over the rule in France also unfolded.
President Nicolas Sarkozy and Chancellor Angela Merkel have reaffirmed their determination to implement in full the resolutions reached by the heads of state and government of the euro-zone states and by the institutions of the European Union on 21 July 2011.
They welcome the measures recently announced by Italy and Spain designed to consolidate the budgets of the two states more swiftly and to enhance their competitiveness.
The Deputy Government Spokesman Christoph Steegmans reports that Chancellor Angela Merkel and French President Nicolas Sarkozy have issued the following joint communiqué.
Joint Franco-German communiqué on the current situation in the euro zone
"President Sarkozy and Chancellor Merkel reiterate their commitment to fully implement the decisions taken by the heads of state and government of the euro area and the EU institutions on July 21st 2011.
In particular, they stress the importance that parliamentary approval will be obtained swiftly by the end of September in their two countries.
They welcome the recent measures announced by Italy and Spain with regard to faster fiscal consolidation and improved competitiveness.
Especially the Italian authorities' goal to achieve a balanced budget a year earlier than previously envisaged is of fundamental importance. They stress that complete and speedy implementation of the announced measures is key to restore market confidence.
As decided on July 21st, the effectiveness of the EFSF will be improved and its flexibility increased linked to appropriate conditionality, in particular through the following instruments: precautionary programme, finance recapitalization of financial institutions and to intervene in secondary markets on the basis of an ECB analysis recognizing the existence of exceptional financial market circumstances and risks to financial stability and on the basis of a decision by mutual agreement of the member states, in order to avoid contagion.
In line with 21st July decisions, France and Germany are confident that the ECB analysis will provide the appropriate basis for secondary market interventions as it will help determine the case when financial stability of the eurozone as a whole is at risk."