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Merkel, Sarkozy Meet Ahead Of Brussels Summit

Dec 5, 2011
Originally published on December 5, 2011 2:04 pm

As European leaders prepare for yet another "last-ditch" effort to save the euro at a summit in Brussels, the leaders of the two eurozone powerhouses, French President Nicolas Sarkozy and German Chancellor Angela Merkel, meet in Paris. NPR's Eleanor Beardsley talks about their meeting.

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On a Monday, it's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.


And I'm Linda Wertheimer. It's a crucial week for Europe, as leaders embark on what may be a last ditch effort to save the euro currency. Today the heads of the eurozone's two largest economies, Germany and France, meet in Paris. They're expected to agree on a master plan for all 27 EU leaders to consider at an emergency summit in Brussels at the end of the week. French president Nicolas Sarkozy and German Chancellor Angela Merkel now agree that European treaties will have to be altered to give institutions the firepower to deal with the crisis, but many differences remain and time is running out.

Eleanor Beardsley reports.

ELEANOR BEARDSLEY, BYLINE: After months of stop-gap half-measures that have failed to stem the crisis and reassure markets, European leaders realize something drastic must be done. Today, Merkel and Sarkozy, who have met so many times they're now known as Merkozy, are expected to come up with a blueprint for saving the currency. In speeches at the end of last week, both leaders prepared their nations for major changes. This time they seem to be determined, says Hans Stark, head of Franco-German studies at the French Institute for International Relations.

HANS STARK: The changing of the treaties is necessary in order to transform the actual eurozone into a budgetary union. It's the only way to save the euro.

BEARDSLEY: Stark says if the European Central Bank is to play a role akin to the Federal Reserve in the crisis, and massively buy up countries' debt, the EU must transform itself into a budgetary federation with tight fiscal rules and repercussions for slackers. But many nations fear a loss of power to Brussels - none more than France.


BEARDSLEY: In a nationally televised speech full of pomp and patriotism, Sarkozy told a packed auditorium Thursday night that France could not go it alone in a global economy. He reassured the French people there was nothing to fear, as he tried to convince them France would have greater power within a more closely aligned Europe.

PRESIDENT NICOLAS SARKOZY: (Through translator) We defend our sovereignty and values better with our allies than alone. That's the biggest lesson of the 20th century.

BEARDSLEY: Going further, he said the two nations must converge their economies into a core of stability and growth at the heart of the eurozone.



BEARDSLEY: Speaking to the German parliament the next day, Merkel echoed Sarkozy's calls to create a tighter fiscal union. But she repeated her opposition to issuing joint euro bonds. There are still differences between France and Germany on how to save the euro, says Stark. But Franco-German agreement is key, and not just because the two countries represent 50 percent of the eurozone's GDP.

STARK: The eurozone is divided into two zones - the northern zone and the southern zone. In the northern zone the budgetary differences are less important, and Germany is kind of the speaker of the zone. France is part of the southern zone, where the deficits are much more important. So if we can succeed in coming over the Franco-German opposition, it will be possible to come over as well the opposition between the southern and the northern part of the European Union.

BEARDSLEY: Some analysts see hope in the latest monumental efforts by Paris and Berlin to tackle the crisis. Another positive sign came last week when European Central Bank head Mario Draghi signaled that the ECB could begin to take more aggressive measures. All this hinges on political leaders finally getting it right at this week's summit. Guntram Wolff is an economist in Brussels. He admits that treaty changes could be long and laborious, but says a solid commitment from European leaders to simply undertake profound changes could calm the markets.

GUNTRAM WOLFF: The treaty change will be an instrument in restoring confidence among the governments in the eurozone and thereby allow the institutions that we have, including the ECB, to credibly intervene in the market and stop basically a full-blown financial crisis.

BEARDSLEY: The stakes couldn't be higher for EU leaders when they gather this Friday in Brussels. As Sarkozy put it, what will remain of Europe if the euro disappears? Answering his own question, he replied: Nothing. Eleanor Beardsley, NPR News, Paris. Transcript provided by NPR, Copyright NPR.