Brussels, 26/07/2011 (Agence Europe) - French President Nicolas Sarkozy turned professor on Tuesday 26 July, explaining the results of the recent extraordinary eurozone summit which agreed the arrangements for a second Greek bail-out and adopted measures to try to prevent the sovereign debt crisis from spreading its contagion to other countries in the euro area (see EUROPE 10424). Writing to French MPs who will have to pass a law inserting a “golden rule” on national indebtedness into the French constitution, he confirms that France and Germany will bring forward joint proposals “before the end of summer” to strengthen governance of the eurozone. A further eurozone summit could take place as early as October, a diplomatic source said in Brussels, on Tuesday 26 July.
The French president is pleased that the idea, which was challenged just a few months ago for making the summit of heads of state and government the central element of eurozone economic governance, has now become accepted. He says the second stage is to structure the work of economic governance. Sarkozy goes on to say that it is not, of course, a matter of merging budgets and ministries into one single, even monstrous, technocracy, as that would be artificial, erroneous and even dangerous. It is a matter, he says, of “drawing the full consequences of the growing interdependency between our countries. For that, we must now determine our economic policies together in order to strengthen our convergence and our competitiveness to the service of our common prosperity”.
On the results of the summit, the French president underlines the ability of European rescue funds (the current EFSF and the future European Stability Mechanism) to intervene in a preventive way, including on the secondary debt market. He goes on to add that Europeans must be given a powerful tool to contain contagion and to stabilise markets by means to counter speculation, and says their ambition is to set up a real European monetary fund. The second Greek bailout plan worth €160 billion, of which €50 billion will be borne by the private sector over the period 2011-2014, provides emergency aid essential to Athens, promotes a medium and long term effort to lighten the country's debt, and provides for private sector participation given Greece's “exceptional situation”. (M.B./transl.jl)