France, Germany push euro governance overhaul

22nd July 2011, Comments 0 comments

France and Germany will push in the coming weeks to overhaul economic governance in the eurozone in the wake of the Greek debt crisis, French President Nicolas Sarkozy said Thursday.

He and German Chancellor Angela Merkel "agreed that we must move forward on economic governance in the coming weeks in an ambitious and willful way," he said after an emergency summit that agreed a new bailout of Greece.

"Our ambition is to seize the Greek crisis to make a quantum leap in eurozone governance," Sarkozy said.

"By the end of this summer we will make common proposals concerning economic governance in the eurozone," he said, adding that EU president Herman Van Rompuy "will make proposals in October."

Merkel told reporters: "Recent times have shown that we must better coordinate our economic and financial policies," adding that she and Sarkozy aimed to present joint proposals by September.

They spoke after eurozone leaders and private lenders agreed a second huge bailout of 159 billion euros ($229 billion) to contain a Greek debt crisis that threatens to spread across Europe and beyond.

Sarkozy suggested that a European credit rating agency could be set up. Eurozone leaders in their final statement Thursday said the EU should reduce reliance on external raters.

The French president has also made economic governance a key priority of his presidency of the G20 grouping of economic powers this year.

Thursday's agreement expanded the role of the eurozone's bailout fund, the European Financial Stability Facility, so it can buy up troubled countries' debt.

Sarkozy said this amounted to "the initiation of a European monetary fund."

© 2011 AFP

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