France and Germany strike deal to present at summit

08.12.2011 [12:27]
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Baku, December 8 (AZERTAC). France and Germany will present EU leaders with a plan to enshrine budget discipline in a new treaty after President Nicolas Sarkozy and Chancellor Angela Merkel struck a deal they hope will bring the debt crisis under control.

The Franco-German proposals, agreed after talks in Paris yesterday, rule out imposing losses on private investors in any future bailouts and include more automatic penalties for governments which fail to keep their deficits under control.

A tough budget discipline regime is seen as a crucial element of the “fiscal compact” demanded recently by Mario Draghi, president of the European Central Bank, and could clear the way to aggressive action by the bank to ease the pressure on euro zone sovereign debt.

The two leaders said they hoped to win agreement on the proposals from all 27 EU states at a summit in Brussels later this week, but were open to proceeding as a smaller group. “Our preference is for a treaty with all 27 so that no one feels left out, but we are ready to move ahead with a treaty for 17, and open to others who wish to join us,” Mr Sarkozy said.

France and Germany strike deal to present at summit

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