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Merkel, Sarkozy propose Euro zone economic government

08-17-2011 13:41 BJT

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German and French leaders proposed an economic government for the Euro zone in a meeting on Tuesday, after week-long turbulence hit financial markets in the region.

But German Chancellor, Angela Merkel, and French President, Nicolas Sarkozy, agreed it wasn't necessary to issue euro zone bonds. The meeting was held amid concerns European leaders aren't doing enough to address the region's sprawling government debts.

All smiles, but the pressure could hardly be higher for German leader Angela Merkel and her French counterpart Nicolas Sarkozy.

The talks in Paris, another step by Europe's two biggest economies to restore fragile investor confidence in the euro zone.

German and French leaders proposed an economic government for the Euro zone in a meeting on Tuesday, after week-long turbulence hit financial markets in the region.

After two hours, some answers.

The leaders proposing an economic government for the bloc.

Sarkozy said, "This economic government will be made up of heads of state and government and will meet twice a year, and more if necessary. It will elect a stable president for two and half years."

Merkel and Sarkozy said increasing the euro zone bailout fund wasn't necessary, and neither was issuing euro zone bonds.

Merkel said, "I neither think that Europe is at the point of needing its last resort, nor do I think that we can solve these problems with what I have called a bang of a drum. And therefore I think that what we are proposing here is the means with which we can solve the crisis right now and win back trust, step by step. I do not think euro bonds will help us in this."

France's President Nicolas Sarkozy, right, and German
Chancellor Angela Merkel gesture to each other prior to
meeting at the Elysee Palace, Tuesday Aug. 16, 2011.
(AP Photo/Philippe Wojazer, Pool)

At times the debt crisis has looked set to tear the euro zone apart.

Greece, Ireland and Portugal have so far needed emergency aid, and there are worrying questions over the financial health of Spain and Italy.

But Merkel and Sarkozy agreed keeping the common European currency intact was crucial.

Sarkozy said, "We want to express our absolute will to defend the euro and assume Germany and France's particular responsibilities in Europe and to have on all of these subjects a complete unity of views and suggestions."

File photo: French President Nicolas Sarkozy, right, and German
Chancellor Angela Merkel.

The leaders also proposed introducing a tax on financial transactions in Europe.

They also want all 17 Euro zone countries to make balanced finances a constitutional goal by the middle of next year.

Angela Merkel has said there's no one answer to the euro zone's problems.

Whether investors think closer economic co-operation will help end the crisis should become clearer when European markets reopen.

Editor:Li Wanran |Source: CNTV.CN

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