Eurozone crisis: Cameron meets Sarkozy as Merkel calls for fiscal pact

Published on Friday 2 December 2011 14:14

David Cameron travelled to Paris today for talks with French president Nicolas Sarkozy amid desperate efforts by eurozone leaders to prevent the single currency breaking up.

The two men are meeting a week ahead of a crunch European Council summit in Brussels, at which proposals will be tabled to save the single currency which could involve rewriting the treaties governing the EU.

As the Prime Minister arrived in the French capital, Chancellor George Osborne called on the 17 eurozone nations to “stand behind their currency” and find a solution to the sovereign debt crisis to allow “economic recovery across the continent”.

Speaking during a visit to the Humber Bridge to mark a reduction in tolls, the Chancellor said: “We need the eurozone to resolve their crisis. We need the countries of the euro to stand behind their currency.

“We do need the countries of the euro to work more closely together to sort out their problems.

“Britain doesn’t want to be a part of that integration - we’ve got our own national interests - but it is in our economic interest that they do sort themselves out. The biggest boost that could happen to the British economy this autumn would be a resolution of the euro crisis.”

European Council President Herman van Rompuy will present a paper setting out options for the way forward to EU leaders at the summit next Thursday.

Mr Cameron is expected to resist proposals favoured by Mr Sarkozy which would effectively create a two-speed Europe, with the 10 non-euro countries sidelined from decisions affecting the single currency.

Today’s meeting was initially intended to be a full-blown Anglo-French summit involving a number of ministers from both sides, but was downgraded to a brief meeting over lunch to prepare the ground for next week.

Mr Sarkozy will meet German Chancellor Angela Merkel on Monday, amid expectations that the two biggest powers in the eurozone will agree a joint plan to drive through at the summit.

The French president said last night that he and Mrs Merkel would unveil proposals to try to lift Europe out of its debt crisis and “guarantee” its future.

“France will push with Germany for a new European treaty refounding and rethinking the organisation of Europe,” Mr Sarkozy said.

Mrs Merkel this morning said the 17 eurozone nations must be subjected to “legally binding regulations” to ensure that they do not fall back into excessive debt.

But it is unclear whether that will require treaty changes to be agreed by all 27 EU member states, including the UK, or whether it can be done by agreement of the eurozone nations alone.

Addressing the Berlin parliament, Mrs Merkel said: “The German government has made it clear that the European crisis will not be solved in one fell swoop. It’s a process, and this process will take years.”

Germany wants the Stability and Growth Pact, which was intended to impose fiscal discipline on eurozone states but has been breached dozens of times, to be replaced with closer supervision of national budgets and more effective rules to keep debt under control.

Berlin is pushing for new powers to send countries to the European Court of Justice if they violate the pact’s requirement to keep deficits below 3 per cent of GDP and government debt under 60 per cent of GDP.

“We need to do away with the underlying deficiencies in the fiscal and currency union,” said Mrs Merkel.

“In order to win back trust, we need to do more. Where we today have agreements, we need in the future to have legally binding regulations.”

Downing Street made clear this morning that the UK is prepared to see the demise of the Pact, adopted in 1997 as part of the Maastricht Treaty process which paved the way to the single currency.

But it was unclear whether Mr Cameron will demand the return of any powers from Brussels in return for UK approval of any treaty change which might be required.

The Prime Minister’s official spokesman told reporters: “We accept the fact that the eurozone needs to look again at the rules that it has for dealing with fiscal policy.

“We accept that the Stability and Growth Pact hasn’t worked and has to be replaced with something else, so it is right that the eurozone are discussing this issue.

“The issue for us is to ensure we have appropriate protections in place to ensure that the single market is maintained and we don’t do anything to jeopardise the single market.”

The spokesman stressed that Britain’s priority in the current negotiations was a successful eurozone.

Asked if Mr Cameron plans to use the process to win back powers from Brussels over issues like employment law, the spokesman said: “In any negotiation and discussion in the EU, we will seek to further our national interests.”

Mr Osborne declined to say whether a limited treaty change would require a referendum in the UK, saying: “Let’s see what comes out of the discussions in Europe, in the eurozone.”

Related Articles

• Cameron urges eurozone to grab chance for stability

  PRIME Minister David Cameron has urged European leaders to take responsibility for restoring market confidence in the single currency.

  1 Comments

• David Cameron tells Angela Merkel new EU treaty is red-line issue

  DAVID Cameron appeared to be on course for a conflict with Germany yesterday after he made it clear he would block any attempts to draw up a new treaty giving the European Union powers over national budgets.

  0 Comments

Comments

There are 6 comments to this article

Order by:

• Newest first
• |
• Oldest first

Page 1 of 1

• 1
• Show all

6

King Crimson

Saturday, December 3, 2011 at 12:01 AM

Comment removed by moderator

5

wl

Friday, December 2, 2011 at 10:06 PM

The member countries of the Eurozone can decide whatever they want to be the rules of participation; in fact they should have done that right at the introduction of the Euro. But that is not relevant for the EU countries who are not a member of the Eurozone and therefor does NOT require changes to the existing treaties.

• Report Unsuitable

4

Jimmy Fae the West

Friday, December 2, 2011 at 06:35 PM

2 Maurice the Dolphin #1 Bunch of malcontent whingers:- "BTW, where's that UK referendum on the EU that we were promised?"................................Cameron could always reply to that one with - "in the second part of this parliament" ______________________________________________________ Sometime after August 2012? It could even be argued that the unelected regime in London are unlikely to survive until May 2015. You really are a Great Brit-Nutter of the most zealot kind.

• Report Unsuitable

3

Jimmy Fae the West

Friday, December 2, 2011 at 06:30 PM

BBC accuses Iran PM of plotting attack on Tehran embassy. Strange that the BBC has had absolutely nothing to say on the attack on the Iran embassy during staged riots of August in London even though video has appeared on Yoochube? I thought we had a police outfit who could trace these cyber criminals in a heartbeat?

• Report Unsuitable

2

Maurice the Dolphin

Friday, December 2, 2011 at 03:49 PM

#1 Bunch of malcontent whingers:- "BTW, where's that UK referendum on the EU that we were promised?"................................Cameron could always reply to that one with - "in the second part of this parliament"

• Report Unsuitable

1

Bunch of malcontent whingers

Friday, December 2, 2011 at 02:53 PM

Large words from Osborne but I can just see the Eurozone finance ministers sitting behind closed door giving GO the "soldiers farewell". BTW, where's that UK referendum on the EU that we were promised?

• Report Unsuitable

Order by:

• Newest first
• |
• Oldest first

Page 1 of 1

• 1
• Show all

Logged in as:

Comment here. Start typing your comment here:

Post comment

Please adhere to our Community guidelines

Your view

Please sign in to be able to comment on this story.