Correspondent's Choice

This story about economic governance was published by EurActiv on 15th June 2010.

Following a meeting in Berlin on 14 June, German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to put forward a compromise plan for an “economic government” of the EU. EurActiv Germany contributed to this article.

In a show of unity amid growing doubts about the capacity of the French-German couple to steer the Union, the two leaders tabled a number of proposals ahead of the 17 June EU summit.

Dropping his earlier insistence that there should be a formal institution to steer the economic governance of the euro zone, Sarkozy accepted Merkel’s suggestion that regular EU summits should play that role.

In response, Merkel accepted that in case of emergency, there would be informal ad hoc meetings of eurozone members.

The two leaders also agreed that governments who breach the Union’s budgetary discipline should have their voting rights suspended.

Sarkozy, who until now had not favoured punitive measures, said that it was not clear if there was a need to change the EU treaty for that purpose.

“If a treaty change is needed we will propose it,” he said.

Merkel and Sarkozy also said they will request that G20 leaders back a tax on banks for all international financial transactions at a summit in Toronto on 26-27 June.

Canada led opposition to the introduction of such a tax when finance ministers from the Group of 20 economic powers met in South Korea earlier this month, but Sarkozy and Merkel made clear they were not prepared to drop the idea.

Merkel said she and Sarkozy would be writing to Canadian Prime Minister Stephen Harper to inform him of what the “conditions” would be for holding the meeting.

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