As the eurozone crisis escalates, Germany and France are discussing radical methods of coping via deeper fiscal ties among eurozone nations—even if it means not working through existing treaties.
Reuters reported that in its quest to impose tighter budget controls on the 17 nations that make up the eurozone, Germany had hoped to get all 27 countries in the European Union to agree to treaty changes to allow such actions. However, the likelihood of winning approval from all 27 is now viewed as unlikely by French President Nicolas Sarkozy and German Chancellor Angela Merkel (left), according to sources with knowledge of their meetings with EU leaders.
Not only that, but getting such a degree of accord could take more than a year, and action is seen as vital within weeks. So the strategy has changed. On Sunday, German Finance Minister Wolfgang Schaeuble said in a television report, “The goal is for the member states of the common currency to create their own Stability Union and to concentrate on that.”
Earlier in the month, it was reported that French and German officials were discussing plans to radically change the EU to create a more fiscally integrated, and possibly smaller, eurozone. A senior EU official who was involved in the discussions had been quoted saying, “The Germans have made up their minds. They want treaty change and they are doing everything they can to push for it as rapidly as possible. Senior German officials are on the phone at all hours of the day to every European capital.”
Still, some countries within the EU are unwilling or unable to act as quickly as Germany and France might like, while others, such as some Eastern European nations, do not agree with their goals. So instead Germany and France are now considering two different strategies, one based on the Pruem Convention of 2005, and another that would be solely between France and Germany but which would, like the Pruem Convention strategy, be open to other nations to agree to.
The goal, according to sources, is to have some kind of agreement ready by the Dec. 9 meeting of EU leaders. Eurozone finance ministers, meeting Tuesday, will have to consider an even more urgent matter. They will have to review and perhaps approve new and detailed operational rules for the European Financial Stability Facility, which reportedly are ready for consideration.