Sarkozy, Merkel urge closer euro economic governance

The financial markets have been clamouring for reassurance over the euro zone debt crisis. And, after talks in Paris, the Franco-German duo has come up with a plan.

Nicolas Sarkozy and Angela Merkel want to float proposals for a tax on financial transactions and push for closer joint governance of economic policy.

“This will consist of heads of state and government,” French President Sarkozy told a joint news conference at the Elysee Palace. “It will meet twice a year, more if necessary, and it will elect a president for two and a half years. We think that should be Herman Van Rompuy, the President of the European Council.”

But the partnership brushed aside calls for the creation of euro bonds.

“I often notice that people look for a one-size-fits-all method that can heal things and bring us out of the crisis,” said the German Chancellor. “And, in this context, people say the last resort is euro bonds. I firmly believe that Europe does not need a last resort. I also don’t believe that we can solve our problems by waving a magic wand,” Merkel added.

The leaders also want all 17 euro zone countries to commit to balanced finances and write that goal into their constitutional law by summer 2012.

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