Germany, France in call for new European treaty
Source: Agencies |
December 6, 2011, Tuesday
|
Print Edition
Print Edition
The leaders of Germany and France called yesterday for a new European Union treaty to restore confidence in the euro and to ensure that the region's debt crisis never happens again.
French President Nicolas Sarkozy said after a meeting with German Chancellor Angela Merkel that they would prefer a treaty agreed by all 27 members of the European Union but would also accept a treaty among just the 17 countries that use the euro.
The new treaty should include automatic sanctions for countries that violate rules meant to keep government deficits in check.
Investors cheered the two leaders' comments, with the euro and stocks rising and bond yields dropping.
The meeting comes at the start of a crucial week for the eurozone, as it struggles to convince markets that it is able to solve its debt crisis.
Sarkozy said a jointly-issued bond by all the countries that use the euro is not the solution to the continent's debt crisis.
Many analysts have said that only by issuing bonds backed by the whole eurozone will Europe be able to save its shared currency.
Stronger countries, like Germany and France, have resisted those calls, but some thought that as the crisis worsens they might be forced to relent. Sarkozy reiterated yesterday, however, that a common bond was "in no way" the solution to the crisis.
Stocks rose responded robustly in early trading yesterday, with the S&P 500 inching above its 200-day moving average, as optimism grew that an upcoming EU summit would resolve the eurozone debt crisis.
The Dow Jones industrial average gained 165.03 points, or 1.37 percent, to 12,184.45. The Standard & Poor's 500 Index gained 21.76 points, or 1.75 percent, to 1,266.04. The Nasdaq Composite Index gained 44.07 points, or 1.68 percent, to 2,671.
In Europe, the FTSE 100 index of leading British shares added 0.6 percent to 5,584 while Germany's DAX rose 0.9 percent to 6,133. The CAC-40 in France gained 1.2 percent to 3,202.
The biggest gainer was Italy's FTSE MIB, which was trading 2.9 percent higher, a day after the government led by Premier Mario Monti agreed to big austerity and growth-boosting measures.
Monti was telling Italian lawmakers there is "no alternative" but to pass his government's anti-crisis package of new taxes, pension reform and growth measures.He said Europe and the world are focusing their attention on Italy and on Parliament to do what is necessary to avoid financial disaster.
Monti called on the nation to make sacrifices, in a speech to the Chamber of Deputies yesterday.
The non-elected government of Monti, an economist, and technocrats depends on Parliament's political parties to get the measures approved quickly.
The cabinet approved the mix of tax rises, pension reforms and incentives to boost growth in a three-hour meeting on Sunday, opening one of the most crucial weeks since the launch of the euro more than a decade ago.
French President Nicolas Sarkozy said after a meeting with German Chancellor Angela Merkel that they would prefer a treaty agreed by all 27 members of the European Union but would also accept a treaty among just the 17 countries that use the euro.
The new treaty should include automatic sanctions for countries that violate rules meant to keep government deficits in check.
Investors cheered the two leaders' comments, with the euro and stocks rising and bond yields dropping.
The meeting comes at the start of a crucial week for the eurozone, as it struggles to convince markets that it is able to solve its debt crisis.
Sarkozy said a jointly-issued bond by all the countries that use the euro is not the solution to the continent's debt crisis.
Many analysts have said that only by issuing bonds backed by the whole eurozone will Europe be able to save its shared currency.
Stronger countries, like Germany and France, have resisted those calls, but some thought that as the crisis worsens they might be forced to relent. Sarkozy reiterated yesterday, however, that a common bond was "in no way" the solution to the crisis.
Stocks rose responded robustly in early trading yesterday, with the S&P 500 inching above its 200-day moving average, as optimism grew that an upcoming EU summit would resolve the eurozone debt crisis.
The Dow Jones industrial average gained 165.03 points, or 1.37 percent, to 12,184.45. The Standard & Poor's 500 Index gained 21.76 points, or 1.75 percent, to 1,266.04. The Nasdaq Composite Index gained 44.07 points, or 1.68 percent, to 2,671.
In Europe, the FTSE 100 index of leading British shares added 0.6 percent to 5,584 while Germany's DAX rose 0.9 percent to 6,133. The CAC-40 in France gained 1.2 percent to 3,202.
The biggest gainer was Italy's FTSE MIB, which was trading 2.9 percent higher, a day after the government led by Premier Mario Monti agreed to big austerity and growth-boosting measures.
Monti was telling Italian lawmakers there is "no alternative" but to pass his government's anti-crisis package of new taxes, pension reform and growth measures.He said Europe and the world are focusing their attention on Italy and on Parliament to do what is necessary to avoid financial disaster.
Monti called on the nation to make sacrifices, in a speech to the Chamber of Deputies yesterday.
The non-elected government of Monti, an economist, and technocrats depends on Parliament's political parties to get the measures approved quickly.
The cabinet approved the mix of tax rises, pension reforms and incentives to boost growth in a three-hour meeting on Sunday, opening one of the most crucial weeks since the launch of the euro more than a decade ago.
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