After a working meeting in Brussels, European Commission President, José Manuel Barroso, and Commissioner for economic and monetary affairs, Olli Rehn, issued the following statement.

The proposals made today by President Sarkozy and Chancellor Merkel are a welcome step forward in our common efforts to strengthen the governance of the euro area. They represent an important political contribution by the leaders of the two largest euro area economies to this debate and the on-going work.

The challenges we are facing have made even clearer that a shared currency implies shared responsibility and demands closer coordination of economic policies. A regular format and frequency for the euro area summits, with a permanent chair, contributes to a more stable and stronger political leadership.

The principle of balanced budgets is the cornerstone of the Stability and Growth Pact. We have proposed a substantial strengthening of rules and enforcement which should be finalised in September together with the European Parliament. The call to enshrine the principle of a debt brake in national constitutional law is a further strong political commitment to the long-term sustainability of public finances.

Finally, a financial transaction tax will be a key instrument to ensure that the financial sector makes a fairer contribution to public accounts. The Commission intends to make a proposal in this sense soon, as previously announced.

We look forward to working with the president of the European Council and the president of the Eurogroup to take forward this debate and to formulate proposals in the coming weeks.