France and Germany want a new EU treaty by March with tougher budgetary rules to deal with the eurozone debt crisis, President Nicolas Sarkozy and Chancellor Angela Merkel said Monday.
The two leaders made the announcement after crunch talks in Paris at the start of a crucial week for the euro, teetering on the brink because of its indebted member states, ahead of a key EU summit in Brussels on Thursday.
“The goal that we have with the chancellor is for an agreement to have been negotiated and concluded between the 17 members of the eurozone in March, because we must move quickly,” Sarkozy said, warning of a “forced march to reestablish confidence in the euro and the eurozone”.
Sarkozy said the new treaty would be either for all 27 EU members or for the 17 members of the eurozone, with other nations signing on a voluntary basis.
The Franco-German proposal is to be detailed in a letter to EU president Herman Van Rompuy on Wednesday, the day before the EU summit convenes in Brussels.
The two leaders backed automatic sanctions against EU member states whose deficits go over three percent of gross domestic product.
They also called for a “reinforced and harmonised golden rule” on deficits, which could oblige some states to enshrine the commitment to balance their public finances in their constitution or legislation.
The European Court of Justice should be tasked with verifying that national budgets obey deficit rules, but it should not be able to declare budgets “null and void”, Merkel said.
With debt contagion threatening to spread throughout the eurozone, Italy kicked off a critical week by presenting a draconian package of cuts, taxes and pension reforms to parliament as Europe tries to pick up the pace to keep the euro alive.
Prime Minister Mario Monti warned that Italy risks a Greek-style “collapse” if it is not adopted, as financial markets cheered the proposals.
Italy, the eurozone’s third-biggest economy, is desperate to prove to its European neighbours that it should be part of the discussions on saving the eurozone — rather than being seen as one of its biggest problems.
Ireland’s Prime Minister Enda Kenny also Monday announced a 3.8 billion euro austerity budget, a day after warning citizens to brace for years of economic hardship during a historic television address.
The call in Paris for tighter discipline and the austerity measures in Rome saw Italy’s long-term borrowing rate fall below the key 6.0 percent threshold for the the first time since the end of October.
Experts consider borrowing rates above 6.0 percent to be unsustainable in the long term for countries with slow growth and low inflation.
Rates also dropped on Spanish and French bonds throughout the day, although they rose for Ireland.
London, Paris and Frankfurt stock markets all closed up after the Sarkozy-Merkel encounter, with Milan’s jumping 2.91 percent.
It was hoped that Monday’s proposals would be seen as a credible guarantee that eurozone governments will at last bring their deficits under control and satisfy restive markets.
European Central Bank chief Mario Draghi has said he could then take action, and many hope the bank will intervene to protect European banks from a credit crunch and buy bonds to rein in soaring rates on government borrowing.
However, Sarkozy said that Germany and France were “in complete agreement to say that eurobonds are in no case a solution to the crisis, in no case.”
“How can we convince others to make the efforts we are making ourselves if we pool our debts as of now? None of this makes any sense.”
Sony Kapoor of the Re-Define think tank warned: “It is far from obvious that the ‘stability union’ envisaged in the Franco-German discussions addresses the main structural and governance failings of the eurozone.”
“After two years of the euro crisis they have reached an agreement to reach an agreement a few months down the line and sign it into force over the next few years.”
Sarkozy called for European summits to be held every month while the euro crisis raged, and for the meetings to have “precise agendas” with markets having in the past accused eurozone leaders of dithering.
Amid concern that the eurozone crisis will trigger a global economic downturn, US Treasury Secretary Timothy Geithner has also been dispatched to Europe, where he arrives on Tuesday to pressure leaders to take effective action.
Maddow reveals how Chinese group Falun Gong went from disrupting events to running a shadow campaign for Trump
MSNBC anchor Rachel Maddow on Tuesday detailed the remarkable journey of the group Falun Gong shifting from disrupting White House events to dominating the conversation on Facebook.
Maddow hilariously recounted the "major embarrassment" for the George W. Bush White House when a protester interrupted remarks by President of China Hu Jintao.
The protester was credentialed to cover the event for the Epoch Times, which is controlled by Falun Gong.
"Well, NBC News has a scoop out today about that group, about how that paper, the Epoch Times has transformed itself a lot in the Trump era. It’s a real revelation, this reporting from NBC News," Maddow said. "I mean, Epoch Times and its media group, they’ve made themselves into a whole new thing entirely and in a very big way."
Trump cancelled his trip to Denmark — because they won’t sell him Greenland
President Donald Trump unleashed a Twitter tirade on the Kindom of Denmark on Tuesday.
"Denmark is a very special country with incredible people, but based on Prime Minister Mette Frederiksen’s comments, that she would have no interest in discussing the purchase of Greenland, I will be postponing our meeting scheduled in two weeks for another time," Trump Tweeted.
"The Prime Minister was able to save a great deal of expense and effort for both the United States and Denmark by being so direct. I thank her for that and look forward to rescheduling sometime in the future," Trump added.
Saudi Arabia eases travel restrictions on women
Saudi Arabia on Tuesday began implementing a landmark reform allowing women over the age of 21 to receive passports and travel abroad without permission from a male "guardian", authorities said.
The reform, announced earlier this month, weakens the restrictive guardianship system that has long been a symbol of repression against women.
"The passport department has started receiving applications for women aged 21 and above to issue or renew passports and to travel outside the kingdom without permission," the department said on Twitter.
Women in the kingdom have long required permission from their male "guardians" -- husband, father and other male relatives -- for these tasks, a restriction that drew international censure.