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 Sarkozy’s 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. “France and Germany have had intense consultations on this issue over the last months, at all levels,” the source said.
“We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don’t want to be part of the club and those who simply cannot be part.”
Plans have not yet reached operational level, but the rumours are already ruffling feathers.
“This will unravel everything our forebears have painstakingly built up and repudiate all that they stood for in the past 60 years,” an EU diplomat told Reuters. “This will redraw the map geopolitically and give rise to new tensions. It could truly be the end of Europe as we know it.”
A French finance ministry spokesperson denied the allegations when asked by Reuters.
Meanwhile, Angela Merkel publicly called for a new “breakthrough” treaty to grant the EU greater powers to stop countries racking up insurmountable debts.
“It is time for a breakthrough to a new Europe,” Merkel announced publicly. “A community that says, ‘Regardless of what happens in the rest of the world, it can never again change its ground rules’, that simply can’t survive.”
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.
Italy’s national debt as a percentage of GDP stands at 118.9 per cent and Greece’s 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 markets’ uncertainty about Italy, the EU’s 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 Commment