News / Europe

German, French Leaders Call for Quick Action on Debt Crisis

French President Nicolas Sarkozy, left, smiles as he greets German Chancellor Angela Merkel prior to their meeting at the Elysee Palace in Paris, December 5, 2011.
French President Nicolas Sarkozy, left, smiles as he greets German Chancellor Angela Merkel prior to their meeting at the Elysee Palace in Paris, December 5, 2011.

Germany and France are pressing their case that European leaders need to act quickly to resolve the continent's debt crisis and save the common euro currency.

German Chancellor Angela Merkel and French President Nicolas Sarkozy detailed their plan Wednesday to end the two-year debt contagion in a letter to European Council President Herman Van Rompuy, a day ahead of a European Union summit in Brussels. The German and French leaders called for automatic penalties against governments that violate budget limits, a unified corporate tax rate and a new financial transaction tax.

Merkel and Sarkozy, who oversee Europe's two strongest economies, said they are "convinced that we need to act without delay." They said new EU treaty provisions should be ready for adoption by March.

But even as they pushed for broad European oversight of individual government budgets, news agencies quoted an unnamed senior German government source as saying that he is more pessimistic than a week ago that all 27 EU nations will agree to treaty changes. More likely, he said, is that the 17-nation bloc that uses the euro might agree to more centralized authority over budgets.

Britain, with its own currency (the pound), says it is worried about handing control over its spending to a new European-wide authority. That could make a Europe-wide debt resolution more difficult to achieve.

Some analysts say the survival of the continent's 12-year monetary union is at stake at the summit. Economists worry that the world economy could plunge into a new recession if the European debt crisis is not resolved.

U.S. Treasury Secretary Timothy Geithner, fearful of the effects of a euro collapse on the fragile American economy, is on a three-day trip to European capitals to prod officials to adopt strong measures.

After meeting with French Finance Minister Francois Baroin in Paris, Geithner expressed confidence that the European officials will move to control government spending, create new economic growth and calm jittery financial markets worried about governments defaulting on their debts.

"The minister and I just had a very good and constructive discussion," said Geithner. "We have a very strong, productive relationship, a lot of confidence in what the president of France and what the minister are doing working with Germany, trying to build a stronger Europe.

"As I said yesterday, we were encouraged by the progress they are making, not just to put in place the economic reforms across Europe to create the conditions for stronger growth in the future, but to try to build a stronger architecture for a fiscal union, a fiscal compact, he continued, "and as the minister said, try to make sure there is a sufficiently strong firewall in place to help support those efforts."

Credit agency Standard & Poor's this week put 15 of the 17 nations that use the euro, including Germany and France, on a negative credit watch. It also warned it may downgrade the top rating of the bailout fund for Europe's debt-ridden countries. Greece, Ireland and Portugal have all already needed international bailouts, with analysts fearing that Italy and Spain, the continent's third and fourth largest countries, also might need help.

The credit rating agency has criticized European officials for "a very slow and reluctant response" to the continent's debt crisis. It has also expressed skepticism that European leaders would act decisively at the summit.

One British bookmaker has adopted a similar outlook, offering gamblers three-to-one odds that the euro will cease to exist by the end of 2012.

Some information for this report was provided by AFP and Reuters.

You May Like

Mood Tense Ahead of Scotland Independence Vote

As race to persuade undecided voters continues, No voters say they believe life in Scotland will slowly improve and do not want to take a risk by endorsing independence More

South Africa’s 'Open Mosque' Admits Everyone, Including Critics

Open Mosque founder plans to welcome gay worshipers and allow women to lead prayers More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid