Key members pledge to ensure survival of eurozone
Updated: 2011-11-25 09:46
STRASBOURG, France - France, Germany and Italy are determined to do everything possible to ensure the survival of the euro, French President Nicolas Sarkozy said after crisis talks Thursday.
Sarkozy said after a mini-summit with German Chancellor Angela Merkel and Italian Prime Minister Mario Monti that the leaders had agreed to "do everything to support and guarantee the euro's durability".
Monti insisted that his country would balance its budget in 2013, despite rising doubts over its ability to do so.
Merkel said that Germany and France's plan to propose changes to EU treaties will not affect the independence of the European Central Bank.
Merkel has been under pressure to allow the ECB to become Europe's lender of last resort, but she said its role would remain unchanged, that is to control inflation before all else.
"The French president has just underlined the European Central Bank is independent," Merkel told reporters at a joint news conference with Sarkozy and Monti after the talks
"So the eventual modifications to the treaties will not concern the duties of the ECB, which concern monetary policy and monetary stability," she added.
Sarkozy said that in order to respect the ECB's independence, countries should make neither "positive nor negative demands" of it.
Germany is under heavy pressure to agree to the creation of eurobonds, pooling benchmark German bonds with bonds issued by governments which have lost market confidence and now face high, almost unsustainable, interest rates.
"It is urgent," French Foreign Minister Alain Juppe said on Thursday in a radio interview. "The situation is serious. We must not underestimate its gravity. It touches even the most solid economies."
France's minister for European affairs, Jean Leonetti, explained: "France eventually wants the ECB to have the same role as the Federal Reserve in the United States. What's going on is very abnormal.
"How can we explain that Germany is having trouble raising funds while it has a stable economy and while the eurozone has a 4 percent public deficit compared to 10 percent in the United States, 8 percent in Japan?
"Why is the euro under attack? It's simple. In the United States there's a Federal Reserve. Europe has the European Central Bank, but the European Central Bank does not buy up sovereign debt if needed," he argued.
Germany, while holding out firmly against such an expansion of the ECB's role, has been calling for changes to European treaties to enforce greater budget discipline on its heavily indebted partners.
But its EU allies warn that such measures would take too long and might prove politically impossible if hard-pressed voters suffering austerity programs or euro skeptic governments like Britain's reject new rules.
In an open letter to Merkel published in the German daily Handelsblatt, Luxembourg's Foreign Minister Jean Asselborn said: "If you, dear chancellor, do get your wish ... please do not forget the risk that the EU will implode."