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Germany

Merkel defends German-French call for changes to EU treaty

German Chancellor Angela Merkel has reiterated her call for key changes to be made to the Lisbon Treaty at this week's EU summit in Brussels. The move has already been met with opposition from several member states.

Chancellor Angela Merkel

Merkel says the EU needs a new and robust framework

Chancellor Angela Merkel has defended a German-French proposal to impose stiffer penalties on European Union countries that breach the criteria of the Stability and Growth Pact.

Speaking to the lower house of parliament on the eve of an EU summit in Brussels on Thursday, Chancellor Merkel said that Germany and France would insist on tougher financial rules, even if it meant amending the Lisbon Treaty, which regulates how the 27-member block operates.

"We need a new, robust framework. It must be legally watertight and this will happen only with a change of the European treaties," she said.

The Stability and Growth Pact requires eurozone countries to maintain a budget deficit of no more than three percent of gross domestic product. However, it has been criticized for lacking proper enforcement mechanisms.

Collision course

Nicolas Sarkozy and Angela Merkel

Sarkozy and Merkel are pushing for tighter rules - but not everyone in the EU agrees

Chancellor Merkel and French President Nicolas Sarkozy are proposing the introduction of semi-automatic sanctions that could only be overruled by a majority vote of EU member states.

"It is true, German-French unity is not everything in Europe," Merkel told the Bundestag, but added that "without Franco-German agreement, little would come of many things - that is true in this case too."

But the EU is already on a collision course ahead of Thursday's summit, because some smaller members, like Luxembourg, are strongly opposed to a proposal that would freeze a member country's voting rights if it breached the criteria of the Stability and Growth Pact.

New emergency fund

The chancellor also said that Germany would support the extension of the current 750-million-euro (one-trillion-dollar) eurozone rescue package when it expires in 2013, but that would require changes to the Lisbon Treaty.

Merkel was also calling for a new emergency EU fund that would rely less on contributions from taxpayers and require more involvement from private banks. Germany pays the lions' share into the current fund.

Merkel told the Bundestag that such a bailout fund was necessary to help prevent future financial crises in the 16-member eurozone.

"Today, we must provide a new and robust framework for coping with financial crises," she said. "This new framework must be legitimate and invulnerable, with no ifs or buts, in no uncertain terms."

Merkel added that this would only be possible with changes to the Lisbon Treaty.

Author: Darren Mara, Andreas Illmer (dpa, AFP)
Editor: Chuck Penfold

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