Germany and France have been privately discussing a dramatic reworking of the Eurozone that could see numerous countries ejected and tighter integration for those who remain.
The proposals reach much further than Sarkozyโs hint on Tuesday that a mere one or two countries might leave the Eurozone. Talks have apparently been going on for much longer than his comments this week suggested.
Reuters broke the news last night after speaking to a Eurozone official who asked to remain anonymous. โFrance and Germany have had intense consultations on this issue over the last months, at all levels,โ the source said.
โWe need to move very cautiously, but the truth is that we need to establish exactly the list of those who donโt want to be part of the club and those who simply cannot be part.โ
Plans have not yet reached operational level, but the rumours are already ruffling feathers.
โThis will unravel everything our forebears have painstakingly built up and repudiate all that they stood for in the past 60 years,โ an EU diplomat told Reuters. โThis will redraw the map geopolitically and give rise to new tensions. It could truly be the end of Europe as we know it.โ
A French finance ministry spokesperson denied the allegations when asked by Reuters.
Meanwhile, Angela Merkel publicly called for a new โbreakthroughโ treaty to grant the EU greater powers to stop countries racking up insurmountable debts.
โIt is time for a breakthrough to a new Europe,โ Merkel announced publicly. โA community that says, โRegardless of what happens in the rest of the world, it can never again change its ground rulesโ, that simply canโt survive.โ
She added that in order to preserve the single currency the EU would have to demonstrate that it was willing to change the Lisbon treaty.
Italyโs national debt as a percentage of GDP stands at 118.9 per cent and Greeceโs at 142.7 per cent. The crippling slowdown in their economies and pending pressure for austerity cuts make it ever more unlikely they will be able to repay their debts.
The marketsโ uncertainty about Italy, the EUโs third largest economy, peaked this week as Italian bonds yields tipped over the critical seven per cent mark.
Find out why the seven per cent mark is significant for Italy at the BBC.
Leave a Comment