Merkel, Sarkozy display unity with no to eurobonds

10th December 2010, Comments 0 comments

German Chancellor Angela Merkel and French President Nicolas Sarkozy Friday projected a show of unity Friday on the eurozone crisis a week before an EU summit, rejecting the idea of eurobonds.

"I am not persuaded that the citizens of France and Germany would be very happy if Mme. Merkel and I accept bundling together all of Europe's debts while there is insufficient harmonisation (of economic policy)," Sarkozy said.

"You shouldn't put the cart before the horse," the president said after talks with Merkel also attended by other French and German ministers in Freiburg, southwest Germany.

"Sharing interest rates and risks is not going to help us structurally," agreed Merkel in a joint news conference. "What is more important is more coherence in economic policy."

Joint eurozone bonds were proposed by Luxembourg Prime Minister Jean-Claude Juncker and Italy's finance minister as a way of helping other countries avoid the fate of Greece and Ireland, two eurozone members that had to be rescued.

Observers have begun openly speculating about a break-up of the 16-country eurozone if other countries follow suit, particularly with voters in Germany already uneasy about the Greek and Irish bailouts.

But Merkel has said eurobonds would be in breach of the EU's governing treaties and would weaken countries' resolve to address what she sees as being at the root of the crisis, namely their weak public finances.

"Countries should be given responsibilities, not have them taken away," Sarkozy said on Friday.

Both leaders stressed that a eurozone breakup was unthinkable.

"We are strongly committed to the euro. The euro is Europe, and a part of our future," Merkel said.

"We are profoundly attached to the euro, because the euro is Europe," agreed Sarkozy.

Juncker, also head of the Eurogroup of finance ministers, earlier in the week called Germany's flat refusal "un-European," prompting Berlin to accuse him of unsettling markets by creating a picture of European disunity.

And Sarkozy on Friday backed Merkel.

"Germany and France have demonstrated their European solidarity. I don't think we need lessons on this," he said.

Countries that are the biggest contributors to the EU's rescue fund "should not be treated as though they are being selfish," he said.

He added: "I don't think we were consulted before this idea was floated. If we had known about it before, perhaps we could have found a compromise."

A poll published on Friday meanwhile found 60 percent of Germans supporting the euro, with 35 percent wanting back their old currency, the deutschmark.

The meeting, also attended by French and German ministers, comes a week ahead of an EU summit at which the bloc's 27 leaders are due to sign off on a new permanent crisis mechanism for after 2013.

"This meeting comes at an extremely important time," the French European affairs minister, Laurent Wauquiez, told the daily Les Echos ahead of the Freiburg gathering.

"Europe is facing great challenges and foreign observers are looking to us to see to what extent the Franco-German partnership can take action."

© 2010 AFP

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