Europe

France's Sarkozy warns Europe risks disintegration

  • 8 December 2011
  • From the section Europe
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French President Nicolas Sarkozy has warned that "never has the risk of disintegration been greater" for Europe in a speech in Marseille.

He was addressing a gathering of European leaders of the centre right.

German Chancellor Angela Merkel said it would take years to overcome the crisis but "we need to have more Europe".

EU leaders are preparing for a key summit in Brussels, where they will be trying to clinch a deal on how to tackle the eurozone debt crisis.

The key proposal on the agenda of the gathering in the Belgian capital later on Thursday is how to enforce budgetary discipline with automatic penalties for those eurozone nations that overspend.

Germany and France are pushing for new European Union treaties, saying stricter fiscal rules should be enshrined there.

Mr Sarkozy said Europe was in much danger.

"Never has Europe been so necessary. Never has it been in so much danger," he said.

"Never have so many countries wanted to join Europe. Never has the risk of a disintegration of Europe been so great. Europe is facing an extraordinarily dangerous situation."

He said the eurozone economies still had a few weeks to decide, but that time was working against them.

"The diagnosis is that we have a few weeks to decide because time is working against us. If we aren't in agreement on this, I fear that we won't be able to agree on anything. That's the analysis."

Mrs Merkel has said changes to the European basic treaty are necessary. She said all 27 member states in the EU had a duty to Europe, and had to work together to overcome the crisis in the eurozone.

National egos and interests had to be put aside, she added.

The two leaders were attending the annual congress of the centre-right grouping in the European Parliament, the European People's Party (EPP), in the southern French city.

As the leaders were speaking, the European Central Bank (ECB) cut its interest rates back to their historic low of 1%, as expected by financial markets.

ECB President Mario Draghi called again for governments to cut their borrowing and reform their economies, but did not mention any new financial support from the ECB for struggling governments.

"We have a treaty that says no monetary financing to governments," he said in response to a question on the subject at a post-meeting news conference.

Earlier, European Commission chief Jose Manuel Barroso, who is also in Marseille, urged the EU to "do everything" to save the euro ahead of the Brussels summit.

"The entire world is watching. We must do everything" to save the euro, he said, adding: "It is extremely important that we all together, all the EU, show that the euro is irreversible."

Merkel-Sarkozy letter

Mrs Merkel and Mr Sarkozy are seeking to enforce budgetary discipline by changing the existing EU treaties.

"We are convinced that we need to act without delay," the two leaders wrote in a joint letter to European Council President Herman Van Rompuy, adding that the new treaty was needed by March.

The Merkel-Sarkozy letter also called for "a renewed contract between the euro area member states".

The German-French plan is based on the following key provisions:

  • the European Commission to have the power to impose penalties for nations that run excessive budget deficits
  • all 17 eurozone nations should amend their national legislation to require balanced budgets
  • the eurozone countries to have common corporation and financial transaction taxes
  • any future bailouts would not require private investors to absorb part of the costs, as happened in the Greece case

The BBC's Europe editor Gavin Hewitt, at the summit in Brussels, says he has been told it is likely that Mr Sarkozy and Mrs Merkel will sit down for brief talks with UK Prime Minister David Cameron, who is seen as the chief objector.

The UK has said it will veto the proposals unless they protect British interests. The French and German leaders will try to establish where the UK's red lines lie, our editor says.

Mr Van Rompuy is offering an alternative plan, a fast-track "fiscal compact" that does not need lengthy ratification by parliaments or national referendums.

The 10 non-eurozone members of the 27-member EU, including the UK, are concerned they may become isolated if the eurozone nations - driven by Berlin and Paris - decide to move to a new treaty on their own.

However, smaller nations in the EU are concerned that majority voting on a new EU bailout fund would give too much power to France and Germany.

A Finnish governmental advisory committee has said 85% majority voting - as the Franco-German proposal outlines - would be "unconstitutional".