Euro Zone - Sarkozy Says Govts Must Keep Control Of Eu Reuters

Thu Dec 1, 2011 4:45pm EST

* Sarkozy sets groundwork for tighter euro governance

* Speech attempts to help rally voters while economic system weakens

* Pressure out of score agencies as well as looming election

By Emmanuel Jarry

TOULON, France, Dec a single (Reuters) - President Nicolas Sarkozy, under stress originating from a spiralling euro zone credit card debt catastrophe several months in advance of a presidential election, advised France on Thursday the particular euro bloc needs better and stricter coordination of national costs to survive.

Seeking to reassure the actual arrest well before a Franco-German push that will redraw your European Union's founding treaty, Sarkozy promised that reforming Europe will necessarily mean closer inter-governmental cooperation, not really handing handle to somewhat of a supra-national body.

"The reform connected with Europe is not a new march toward supra-nationality," he or she claimed within a presentation to a few 5,000 supporters from the Mediterranean interface of Toulon. "The integration connected with Europe could go that inter-govermental way for the reason that Europe would need to make organizing political choices."

Sarkozy stated he might meet German Chancellor Angela Merkel with Paris on Monday to be able to push ahead along with joint proposals for a innovative EU treaty to repair blemishes inside the Maastricht Treaty and also result in a correct monetary government with the bloc.

He claimed France and also some other euro zoom nation was required to enshrine your budget-balancing "golden rule" in their constitutions, to pressure stricter monetary style because the bloc strives for you to reform itself or even obtain left behind.

He in addition reported this European Central Bank have to stay independent and choose for once more as soon as to act resistant to the threat involving deflation.

"Europe will be no more a new choice. It is usually a necessity. But the actual problems has revealed it's weak points as well as its contradictions. Europe have to end up being rethought," Sarkozy said.

"Let us not hide it, Europe may be swept aside by way of the crisis if aging acquire a grip, if this doesn't happen change," they said, forewarning this some sort of collapse on the euro would certainly create France's debt unrestrainable plus obliterate clients' savings.

The site of Toulon was emblematic the way it seemed to be inside exact in a niche community that Sarkozy railed, following the Sept. 2008 collapse of Lehman Brothers, towards the risks involving unfettered capitalism.

2012 ELECTION LOOMS

Sarkozy, who faces some sort of bruising combat to remain in power throughout an April election, will be trying for you to coloring themself seeing that best-placed to help direct France as a result of yet far more economic turmoil though laying the research for proposals about moreheavy-duty euro zone governance which will possibly be talked over from an EU summit on Dec. 9.

The centre-right head has been forced proper corner by simply that France's A credit score will be in better danger along with every single day this your euro area unsecured debt situation is kept for you to fester.

Rating firms possess informed which a looming downturn along with the risk of owning to assist banking institutions exposed in order to debt-laden euro zone peripheral states is straining open public finances, rearing the particular spectre of any downgrade that will be a new knock back to Sarkozy and can create 3 million euros to be able to France's twelve-monthly awareness costs.

The centre-right leader is actually packed between having to appease economic markets simply by agreeing some sort of intend to fasten monetary liability while wanting to stay clear of listed to voters that they are providing your European Commission too much say in criminal court finances.

Sarkozy stated better European integration did not mean undermining autonomy. "Europe does not necessarily follow much less sovereignty, nevertheless extra sovereignty because them usually means more capability to act," he / she informed that audience, flanked from the French plus EU flags.

Sarkozy recently identified as a truce together with Merkel around his press with the ECB ahead to this aid regarding stressed euro expresses and also offers acquiesced that will Germany's desire for further core governance, however proposals may not be however final.

Merkel is due to format your ex concepts on euro governance along at the Bundestag on Friday, when Sarkozy talks about the actual matter around Paris together with British Prime Minister David Cameron.

"A comprehensive agreement possesses undoubtedly come forth about cost as well as fiscal convergence together with harmonisation. There can be general opinion related to euro zone countries' commitments in order to deficit-reduction targets," Finance Minister Francois Baroin said earlier.

Yet Sarkozy could not voice every assist inside his or her presentation with regard to Berlin's drive for your more robust function with the European Commission or perhaps your European Court associated with Justice inside forcing funds discipline.

At the same time, your dog definitely avoided any kind of mention of his or her earlier travel for that ECB to get made possible to obtain up obtain bonds regarding troubled euro area says en masse, saying only of which the ECB had a major role that can be played in addition to would think it has the responsibilities.

Sarkozy claimed began seeing beyond problems intended for France had been by way of cranking up end result plus controlling costs, stressing that will France's high priced welfare market urgent needed overhauling.

He stated ?t had been in addition crucial to work while using sleep of Europe.

He strove, however to help dispel every fears associated with quitting French sovereignty, once worry regarding their plans with Merkel sparked an outcry this week involving opposition Socialists. The concept is just as sensitive on the right.

Government spokeswoman Valerie Pecresse reported on Wednesday that precisely what France appeared to be looking for was greater financial self-discipline been able by governments and also country wide parliaments.

Sarkozy, whose speech seemed to be painstakingly prepared through two leading advisors, is definitely staking his re-election upon persuading voters weary with fiscal gloom make have to keep him inside power rather then taking Hollande, who have by no means served inside a administration post.