German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin yesterday in an effort to smooth out differences between the views of the two European superpowers before the EU summit on 30 January that will focus on stimulating the economy and labor market. The two leaders said they had made progress with plans to enter a treaty to tighten budgetary rules in the euro area for a closer integration of monetary union, writes MarketWatch.
Merkel said that negotiations on a new EU treaty will be finalized within a few days, and the agreement will be signed by March 1. The German official warned that Greece can not receive money from the EU and the IMF if the details of the second bailout package are not in place quickly, including the participation of private holders of Greek bonds. German Chancellor stressed that European leaders will not allow any state to leave the euro zone, according to The Telegraph. Sarkozy admitted that the situation in Europe is “very tense” and called for negotiations on the fiscal treaty to end quickly.
Merkel and Sarkozy also announced that European finance ministers want to develop a plan for a tax on financial transactions in the EU by March to make banks pay for their role in financial crisis. If an EU-wide agreement will not be possible, Germany and France will insist on an agreement in the euro zone. Merkel said that there is no full agreement of Parliament in this regard. Chancellor is known to encourage measures that are not supported in Germany, writes The Telegraph.
“The outrageous deregulation of the financial system must be stopped”, said Sarkozy, noting that those who have helped creating the financial crisis should be put to solve. Merkel and Sarkozy have also agreed to ask the European Central Bank to do whatever it is in its power to make the eurozone rescue fund, EFSF, to operate at maximal parameters. “We can not have a future for Europe based on differences between France and Germany. I trust Merkel to cooperate in any matter. Our analysis shows the same thing. First, we should commit to reducing the budget deficit”, said Sarkozy.
The tax on financial transactions could leave a hole of 116 billion euros in EU finances
Introducing a tax on financial transactions across the European Union could leave a gap of 116 billion euros in EU finances, it said in a report of Erst & Young, taken by The Telegraph. British Prime Minister David Cameron said that Britain would oppose any attempts to implement such a tax, arguing that its introduction in the EU alone will affect the job market in Europe and the prosperity of the region. The European Commission announced that the tax could be introduced only by a few European countries if others will not accept it. Implementation would be done by the procedure of “enhanced cooperation”, which requires participation of at least nine countries.
