French President Nicolas Sarkozy said Thursday that Paris and Berlin will announce in the next days “joint proposals to amend the EU treaties in order to improve governance in the euro area”, informs AFP. Nicolas Sarkozy made the statement at the end of the meeting that he had in Strasbourg with German Chancellor Angela Merkel and the new Italian Prime Minister, Mario Monti. The discussions were related to crisis management in the euro area.
According to Sarkozy, the three main euro area economies, Germany, France and Italy, are ready to do everything for “sustainability of the euro”. France, Germany and Italy agree to respect the independence of the European Central Bank and shall refrain from making demands “positive or negative” about this institution, added Nicolas Sarkozy. “We established that, in order to respect the independence of this institution, we refrain to make positive or negative requests to ECB”, said Sarkozy, while Chancellor Angela Merkel said that the change of EU treaties will not affect the ECB.
Prime Minister of Italy, Mario Monti, confirmed Thursday his country’s commitment to achieve the “goal of a balanced budget in 2013”. Yesterday, S & P warned that the credit ratings of countries in the euro area could be reduced if “large areas” of the currency bloc will come next year to a new round of recession. David Beers, general manager of the division of the country ratings of S & P, also said that he anticipates a compromise between the European Central Bank and euro area governments about resolving the state debt crisis.
“Since there is so much risk, we should expect the euro area monetary authorities and national authorities could find some sort of compromise, a balance between substantial measures at the government level and more aggressive action from the ECB in order to combat a new economic depression”, said Beers in a speech Wednesday in Dublin. The chief of S & P warned, however, that the entry of “large areas” of the euro area in recession could be hard to avoid if state bond yields remain at high levels and bank assets continue to drop.