Paris summit greeted with relief in Germany

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German commentators Wednesday welcomed a vow by Berlin and Paris to give the eurozone a "true economic government", seen as a first step towards curbing the eurozone financial crisis.

The Frankfurt stock exchange however reacted with scepticism, losing ground in early trading as shares in the stock market operator Deutsche Boerse fell by more than six percent owing to a proposed tax on financial transactions.

German Chancellor Angela Merkel and French President Nicolas Sarkozy made the proposal at an anxiously anticipated summit meeting Tuesday in Paris.

Newspapers and politicians, including many from the opposition, reacted positively to proposals by Merkel and Sarkozy to strengthen economic integration of the eurozone which has been under attack in financial markets because of the growing debt crisis.

Frank-Walter Steinmeier, the parliamentary leader of the Social Democrats, the main opposition party to Merkel's centre-right coalition, suggested proposals made were first steps "on the right road".

But they would not solve the current financial crisis, he added.

"What we are faced with is a refinancing crisis of countries over-burdened by debt. We need a fireman to deal with this. Getting better warnings about fires in the future doesn't help put out the blaze currently threatening the euro," he told ARD public television.

He also criticised Merkel and Sarkozy's decision to brush under the carpet the question of eurobonds, seen by many as a means of alleviating the risk of debt contagion.

Merkel, egged on by the pro-business Free Democrats (FDP) in her coalition government, has repeatedly rejected the idea of issuing eurobonds, while Sarkozy suggested Tuesday such a move could only come in the wake of greater financial integration of the eurozone.

FDP leader Philipp Roesler, who had appealed to Merkel to reject any quick-fix measures, told ARD television the Franco-German proposal that eurozone members should inscribe a proviso to maintain balanced budgets in their constitutions was "a good signal to citizens and to the markets".

Germany already has such an article in its constitution.

Meanwhile newspapers were divided.

Berlin's centre-left Tagesspiegel said the summit was proof that the "Franco-German engine was alive and well" in Europe while Spiegel magazine website said the summit was a sum of "big words and small deeds".

© 2011 AFP

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