S&P review: Paris, Berlin pledge 'necessary' steps

6th December 2011, Comments 0 comments

France and Germany pledged Monday to take "all necessary measures" to ensure the stability of the eurozone after Standard & Poor's said the two countries risked losing their triple-A ratings.

"France and Germany, in full solidarity, confirm their determination to take all the necessary measures, in liaison with their partners and the European institutions to ensure the stability of the euro area," Paris and Berlin said in a joint statement, adding they "take note" of the possible S&P action.

"France and Germany reaffirm that the proposals they made jointly today will reinforce the governance of the euro area in order to foster stability, competitiveness and growth," said the statement.

The leaders of the two nations demanded earlier Monday, ahead of a crisis summit later this week, a new EU treaty with tougher budgetary rules to deal with the eurozone debt crisis.

German Chancellor Angela Merkel and French President Nicolas Sarkozy backed automatic sanctions against EU member states whose deficits exceed three percent of gross domestic product.

Standard and Poor's warned Germany, France and 13 other eurozone members they faced a possible credit downgrade amid worsening economic conditions and discord among the region's leadership.

The warning threatened a one-notch cut to the AAA ratings of Germany, the Netherlands, Finland, Luxembourg and Austria.

France, also AAA-rated and the eurozone's second-largest economy, could be hit with a two-step cut.

French Finance Minister Francois Baroin sought to give an assurance late Monday that "everything has been done to protect the savings of the French".

© 2011 AFP

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