EU's Barroso hails 'important' steps by Merkel, Sarkozy

16th August 2011, Comments 0 comments

European Commission President Jose Manuel Barroso hailed Tuesday the "important" agreement reached by German Chancellor Angela Merkel and French President Nicolas Sarkozy on the way forward for the crisis-hit eurozone.

Barroso said plans including a permanent governorship of the eurozone's combined economy "represent an important political contribution by the leaders of the two largest euro area economies."

"A regular format and frequency for the euro area summits, with a permanent chair, contributes to a more stable and stronger political leadership," Barroso said of the call for European Union President Herman Van Rompuy to become the focal point of new, cross-border economic governance.

In a joint statement issued alongside his commissioner for economic affairs, Olli Rehn, Barroso also said a demand that all 17 eurozone governments adopt similar laws to Berlin enshrining balanced budgets, as well as a move to introduce a financial transactions tax, together amounted to a "welcome step forward".

They said: "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."

Meanwhile, "a financial transaction tax will be a key instrument to ensure that the financial sector makes a fairer contribution to public accounts," they said, promising new legislative plans in this area.

Sarkozy and Merkel vowed to give the eurozone bloc a "true economic government" during their Paris meeting, but the pair disappointed many observers by not backing the idea of issuing "eurobonds" to pool eurozone debts and by insisting that the bloc's existing 440-billion-euro bailout fund is "sufficient".

Barroso made no reference to either decision, just a week after he called for "all elements" including the size of the rescue fund to be revisited by EU leaders in the autumn.

© 2011 AFP

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