GERMANY AND FRANCE presented proposals to bring greater economic cohesion among eurozone members and to strengthen the EU’s bailout fund at an EU summit last night in Brussels.
Angela Merkel and Nicolas Sarkozy presented a plan to improve eurozone competitiveness, but did not supply a detailed outline of their proposals.
Merkel said Germany and France will defend the euro as a currency and as a political project, and called for a “closer economic coordination and greater economic governance”.
Leaders agreed to decide on extended the EU’s €440bn European Financial Stability Facility by the end of March, according to the AP. Details of what the competitiveness pact could cover, such as dropping low corporation tax levels, will also be decided by the end of March.
The plans put forward by France and Germany show that the euro was created as a monetary union without economic union, according to the BBC’s Europe correspondent Chris Morris.
Harmonisation
At yesterday’s summit, Sarkozy and Brian Cowen were involved in sharp exchanges, Arthur Beesley reports in the Irish Times.
Cowen afterwards said he defended Ireland’s 12.5% rate and its effect on the country’s competitiveness, but said that no proposal on corporation tax was presented at the summit.
He did not comment on any link between changing the corporate tax level and a reduced interest rate on Ireland’s bailout fund, according to Beesley.
The next EU leaders’ summit will to take place after a new government has taken office in Ireland on 9 March, meaning that government will have about a fortnight to prepare for an end-of-month summit on the details of the Franc0-German competitiveness plan.
Watch Angela Merkel and Nicolas Sarkozy call for a European ‘pact of competitiveness’:
Video posted by EUXTV
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