الرئيسية
By Catherine Bremer and Stephen Brown, Reuters
PARIS/BERLIN (Reuters) - British Prime Minister David Cameron
threatened on Friday to obstruct a Franco-German drive for swift change
to the European Union's treaty, a sign of the difficulty leaders will
face transforming Europe to save the euro.
France and Germany
are reaching a consensus that euro zone economies need to be bound more
closely together if the single currency is to survive, which could mean
changing the EU treaty to give Brussels powers to punish spendthrift
euro states.
Austrian Chancellor Werner Faymann said there was a
danger that the euro zone bloc would split up unless it implemented new
rules and stuck to them.
"When we are not able to set up and keep
to more conditions and ground rules, then many countries in the euro
zone will no longer be able to pay the very high rates for sovereign
bonds," he told the daily Krone.
"The next effect will be that
you won't find anyone to buy them. Then the euro zone has to break up
because of this.... it is a very real danger."
After talks with
French President Nicolas Sarkozy, Cameron said he was not convinced
treaty change was needed to reinforce the single currency zone, which
Britain has refused to join. If the 27-nation bloc's charter were
reopened at a crunch summit on December 9, he would have his own agenda.
The
British leader said euro zone institutions such as the European Central
Bank needed to "get behind the currency" to convince markets that it
had the required firepower, and member states had to make their
economies more competitive.
"Neither of those things require
treaty change, but if there is treaty change I will make sure that we
further protect and enhance Britain's interests," he told reporters.
There was no immediate comment from Sarkozy's office.
Cameron
faces pressure from Eurosceptics in his Conservative party to loosen
Britain's ties with the EU and secure guarantees that any move towards
fiscal union on the continent does not harm the interests of the City of
London financial centre.
Sarkozy tried to persuade him to allow
stricter budget discipline procedures for the euro zone without
insisting on returning powers over social and judicial affairs from
Brussels to London or seeking a veto right over EU financial regulation.
German
Chancellor Angela Merkel called earlier for rapid but limited treaty
change to remedy what she sees as the root causes of Europe's raging
sovereign debt crisis, warning that Europeans faced a "marathon" to
regain lost credibility.
Outlining a long-term approach to
tighter fiscal integration in the single currency area, with tougher
budget discipline, she dismissed quick fixes such as massive U.S.-style
money printing by the European Central Bank or issuing joint euro zone
bonds.
"Resolving the sovereign debt crisis is a process, and
this process will take years," Merkel told parliament, vowing to defend
the euro, which she said was stronger than Germany's former
deutschemark.
The chancellor travels to Paris on Monday to
outline joint proposals with Sarkozy for treaty changes to create
coercive powers to reject national budgets and impose automatic
sanctions on serial deficit sinners. U.S. Treasury Secretary Timothy
Geithner will meet key leaders and central bankers December 6-8 in
Europe the EU summit.
Next Friday's gathering is seen by some as
make-or-break for the euro zone after a string of half-measures agreed
too late by European leaders over nearly two years have failed to stop
bond market contagion spreading from Greece to Ireland, Portugal and now
Italy and Spain.
Sources close to Merkel said she was willing to
see the ECB step up buying of troubled euro zone countries' bonds,
alongside smart use of the bloc's rescue fund, as a bridging measure
until budget controls took hold, but she did not see it as a lasting
solution.
Her speech set the agenda for a week of intense
diplomacy to try to frame a new political deal to restore market
confidence and give the ECB grounds to act more decisively to defend the
euro and support teetering banks.
The European Central Bank has
been reluctant to commit to buying bonds in large quantities like the
"quantitative easing" carried out by the U.S. Federal Reserve and the
Bank of England.
ECB executive board member Juergen Stark said a solution was urgent but added finding it was the job of politicians.
"The
lingering and expanding sovereign debt crisis must be halted to avoid
macroeconomic and financial disaster, in the euro area and beyond," he
said in a speech in New York. "No country is immune any more to a loss
of market confidence in its public finances."
BREAKUP SCENARIOS
World
stocks and European bonds continued to gain on hopes that euro zone
leaders may be moving closer to a comprehensive solution to the debt
crisis.
But in a sign that business leaders are beginning to
doubt whether the currency will survive, the chief executive of Austrian
energy group OMV said dozens of top European executives were working on
post-euro contingency plans.
"I was recently in Paris with some
other representatives of large companies and we discussed this
question," Gerhard Roiss told reporters on Friday when asked if he had
plans for a euro breakup. About half the 45 firms present had confirmed
they were working on such scenarios.
ECB President Mario Draghi
sent a crucial signal to markets on Thursday, opening the door to more
aggressive action to help fight the euro zone's sovereign debt and
banking crisis if governments adopted a new "fiscal compact."
Sarkozy
embraced German calls for a new treaty tightening fiscal discipline in a
policy speech on Thursday, but unlike Merkel he made no mention of
greater powers for the European Commission and European Court of
Justice.
Instead, the French leader, struggling to win
re-election next May, called for an "intergovernmental" Europe in which
the presidents and prime ministers of euro zone countries would be the
ultimate arbiters over national budgets.
His socialist opponents
denounced him for advocating an "austerity treaty" dictated by Germany.
Merkel went out of her way to rebut such accusations, telling the
Bundestag it was "misleading" to suggest Germans were trying to dominate
Europe.
The president of the European Parliament, Jerzy Buzek of
Poland, said treaty change could be "dangerous" because Europe's
citizens were unlikely to warm to the idea.
MARKETS RECOVER
EU
diplomats said Paris and Berlin hoped to find agreement among all 27
member states for limited treaty amendments rather than having to take
the more divisive route of drafting a separate blueprint for the 17 euro
zone states or fewer.
German officials praised the conservative
Sarkozy's courage in telling voters that France would have to overhaul
its social model and cut public spending.
On the markets, German
10-year Bunds outperformed safe-haven U.S. Treasuries and British gilts
as investors saw prospects of an EU summit deal and ECB action to ease
funding for cash-starved banks and to counter a looming recession in
Europe.
Italy's 10-year bond yield was down to 6.65 percent, well
below the danger levels close to 8 percent they hit last week, which
analysts said could make it impossible for Rome to refinance its debt
next year. Spain's 10-year borrowing cost tumbled to 5.68 percent.
Sentiment
has turned more positive since the world's major central banks took
emergency joint action on Wednesday to provide cheaper dollar funding
for European banks, a move which suggested they feared a funding crunch
was imminent.
A key measure of dollar funding stress felt by euro
zone banks, the three-month euro/dollar cross currency basis swap, has
narrowed by 30 basis points since the coordinated central bank move to
around minus 130 bps.
(Additional reporting by Noah Barkin in
Berlin, Kirsten Donovan in London, Emmanuel Jarry in Toulon, Michael
Martina in Beijing; Writing by Paul Taylor; Editing by Janet McBride,
Mike Peacock and Peter Graff)
PARIS/BERLIN (Reuters) - British Prime Minister David Cameron
threatened on Friday to obstruct a Franco-German drive for swift change
to the European Union's treaty, a sign of the difficulty leaders will
face transforming Europe to save the euro.
France and Germany
are reaching a consensus that euro zone economies need to be bound more
closely together if the single currency is to survive, which could mean
changing the EU treaty to give Brussels powers to punish spendthrift
euro states.
Austrian Chancellor Werner Faymann said there was a
danger that the euro zone bloc would split up unless it implemented new
rules and stuck to them.
"When we are not able to set up and keep
to more conditions and ground rules, then many countries in the euro
zone will no longer be able to pay the very high rates for sovereign
bonds," he told the daily Krone.
"The next effect will be that
you won't find anyone to buy them. Then the euro zone has to break up
because of this.... it is a very real danger."
After talks with
French President Nicolas Sarkozy, Cameron said he was not convinced
treaty change was needed to reinforce the single currency zone, which
Britain has refused to join. If the 27-nation bloc's charter were
reopened at a crunch summit on December 9, he would have his own agenda.
The
British leader said euro zone institutions such as the European Central
Bank needed to "get behind the currency" to convince markets that it
had the required firepower, and member states had to make their
economies more competitive.
"Neither of those things require
treaty change, but if there is treaty change I will make sure that we
further protect and enhance Britain's interests," he told reporters.
There was no immediate comment from Sarkozy's office.
Cameron
faces pressure from Eurosceptics in his Conservative party to loosen
Britain's ties with the EU and secure guarantees that any move towards
fiscal union on the continent does not harm the interests of the City of
London financial centre.
Sarkozy tried to persuade him to allow
stricter budget discipline procedures for the euro zone without
insisting on returning powers over social and judicial affairs from
Brussels to London or seeking a veto right over EU financial regulation.
German
Chancellor Angela Merkel called earlier for rapid but limited treaty
change to remedy what she sees as the root causes of Europe's raging
sovereign debt crisis, warning that Europeans faced a "marathon" to
regain lost credibility.
Outlining a long-term approach to
tighter fiscal integration in the single currency area, with tougher
budget discipline, she dismissed quick fixes such as massive U.S.-style
money printing by the European Central Bank or issuing joint euro zone
bonds.
"Resolving the sovereign debt crisis is a process, and
this process will take years," Merkel told parliament, vowing to defend
the euro, which she said was stronger than Germany's former
deutschemark.
The chancellor travels to Paris on Monday to
outline joint proposals with Sarkozy for treaty changes to create
coercive powers to reject national budgets and impose automatic
sanctions on serial deficit sinners. U.S. Treasury Secretary Timothy
Geithner will meet key leaders and central bankers December 6-8 in
Europe the EU summit.
Next Friday's gathering is seen by some as
make-or-break for the euro zone after a string of half-measures agreed
too late by European leaders over nearly two years have failed to stop
bond market contagion spreading from Greece to Ireland, Portugal and now
Italy and Spain.
Sources close to Merkel said she was willing to
see the ECB step up buying of troubled euro zone countries' bonds,
alongside smart use of the bloc's rescue fund, as a bridging measure
until budget controls took hold, but she did not see it as a lasting
solution.
Her speech set the agenda for a week of intense
diplomacy to try to frame a new political deal to restore market
confidence and give the ECB grounds to act more decisively to defend the
euro and support teetering banks.
The European Central Bank has
been reluctant to commit to buying bonds in large quantities like the
"quantitative easing" carried out by the U.S. Federal Reserve and the
Bank of England.
ECB executive board member Juergen Stark said a solution was urgent but added finding it was the job of politicians.
"The
lingering and expanding sovereign debt crisis must be halted to avoid
macroeconomic and financial disaster, in the euro area and beyond," he
said in a speech in New York. "No country is immune any more to a loss
of market confidence in its public finances."
BREAKUP SCENARIOS
World
stocks and European bonds continued to gain on hopes that euro zone
leaders may be moving closer to a comprehensive solution to the debt
crisis.
But in a sign that business leaders are beginning to
doubt whether the currency will survive, the chief executive of Austrian
energy group OMV said dozens of top European executives were working on
post-euro contingency plans.
"I was recently in Paris with some
other representatives of large companies and we discussed this
question," Gerhard Roiss told reporters on Friday when asked if he had
plans for a euro breakup. About half the 45 firms present had confirmed
they were working on such scenarios.
ECB President Mario Draghi
sent a crucial signal to markets on Thursday, opening the door to more
aggressive action to help fight the euro zone's sovereign debt and
banking crisis if governments adopted a new "fiscal compact."
Sarkozy
embraced German calls for a new treaty tightening fiscal discipline in a
policy speech on Thursday, but unlike Merkel he made no mention of
greater powers for the European Commission and European Court of
Justice.
Instead, the French leader, struggling to win
re-election next May, called for an "intergovernmental" Europe in which
the presidents and prime ministers of euro zone countries would be the
ultimate arbiters over national budgets.
His socialist opponents
denounced him for advocating an "austerity treaty" dictated by Germany.
Merkel went out of her way to rebut such accusations, telling the
Bundestag it was "misleading" to suggest Germans were trying to dominate
Europe.
The president of the European Parliament, Jerzy Buzek of
Poland, said treaty change could be "dangerous" because Europe's
citizens were unlikely to warm to the idea.
MARKETS RECOVER
EU
diplomats said Paris and Berlin hoped to find agreement among all 27
member states for limited treaty amendments rather than having to take
the more divisive route of drafting a separate blueprint for the 17 euro
zone states or fewer.
German officials praised the conservative
Sarkozy's courage in telling voters that France would have to overhaul
its social model and cut public spending.
On the markets, German
10-year Bunds outperformed safe-haven U.S. Treasuries and British gilts
as investors saw prospects of an EU summit deal and ECB action to ease
funding for cash-starved banks and to counter a looming recession in
Europe.
Italy's 10-year bond yield was down to 6.65 percent, well
below the danger levels close to 8 percent they hit last week, which
analysts said could make it impossible for Rome to refinance its debt
next year. Spain's 10-year borrowing cost tumbled to 5.68 percent.
Sentiment
has turned more positive since the world's major central banks took
emergency joint action on Wednesday to provide cheaper dollar funding
for European banks, a move which suggested they feared a funding crunch
was imminent.
A key measure of dollar funding stress felt by euro
zone banks, the three-month euro/dollar cross currency basis swap, has
narrowed by 30 basis points since the coordinated central bank move to
around minus 130 bps.
(Additional reporting by Noah Barkin in
Berlin, Kirsten Donovan in London, Emmanuel Jarry in Toulon, Michael
Martina in Beijing; Writing by Paul Taylor; Editing by Janet McBride,
Mike Peacock and Peter Graff)