VIDEO Debt Crisis: Sarkozy and Merkel outline plans for new Europe with strict rules
GERMAN Chancellor Angela Merkel and French President Nicolas Sarkozy have outlined plans for a new Europe including immediate sanctions for eurozone countries that break the 2pc budget deficit rules.
They also confirmed that the European Central Bank will not be a lender of last resort for any of the indebted 17 eurozone countries while eurobonds will not be introduced either.
At a joint press conference after a lunch meeting today, the duo, dubbed Merkozy, said the new rules would be part of a renegotiated European Union treaty that is to be finalised by March and ratified in May.
Under the rules, governments whose debts breach the 3pc of Gross Domestic Product limit would be cited by the European Court of Justice.
And a majority of 85pc of European governments would have to agree to impose fines on those countries.
“Our preference is for a treaty of 27, but we’re perfectly ready to have a treaty of 17,” Mr Sarkozy said, highlighting that all European member states would be expected to sign up to the new rules eventually.
The new accord will be outlined to European Union leaders in Brussels on Wednesday and voted on at a special summit on Thursday.