French official: new pact needed for eurozone

AP News
Posted: Nov 27, 2011 1:30 PM
French official: new pact needed for eurozone

An "overhaul" of European treaties is needed to help restore market confidence in the eurozone's ability to reduce high state debt and deficits, the French budget minister said Sunday.

Valerie Pecresse said a new governance pact among eurozone members could include "real regulators, real sanctions" to help restore confidence in the currency union.

Speaking on Canal Plus TV, she said the eurozone's biggest economies _ France, Germany and Italy _ want to be the "motor" of a more integrated Europe.

"We won't restore confidence unless we show proof _ very quickly _ about the unflailing solidity and solidarity of the eurozone," Pecresse said.

Pecresse said each country must rid itself of the debt and deficit problems that are behind the continent's deepening debt crisis.

German media reported this weekend that German Chancellor Angela Merkel and French President Nicolas Sarkozy are pushing for swift legal changes that would force eurozone members to comply with strict rules for budget discipline, like tough and easily enforceable sanctions for violators.

Sarkozy and Merkel have argued that the European Union's treaties must be amended to guarantee a strict enforcement of the currency zone's growth and stability pact.

Treaty changes, however, are complicated to engineer and take a lot of time _ probably more than the troubled eurozone currently has with markets doubting the solidity of several member states such as Italy.

One alternative could be a treaty between the governments involved, which would later be merged into EU law _ as has happened before with Europe's Schengen visa-free travel agreement, German newspapers Welt am Sonntag and Bild reported.

The new initiative could be announced as early as this week and concluded early next year, Welt am Sonntag reported.

Germany's government, in a statement Sunday, did not comment on the question of an intergovernmental treaty but said it's continuing to push for changes to the EU treaty to be discussed at a summit next month in a bid to strengthen the currency union.