BRATISLAVA, August 17, (WEBNOVINY) — Prime Minister Iveta Radicova called the mandatory constitutional amendments requiring balanced budgets of euro club members, proposed by German Chancellor Angela Merkel and French President Nicolas Sarkozy, the right solution. “I hail decisions that force individual countries to behave responsibly. Since the first moment, the SDKU-DS and I myself, too, believe that the only real assistance and solution to the given situation is the fiscal consolidation and reforms,” the prime minister told journalists on Wednesday. Radicova, however, rebuked proposed potential bilateral agreements between Germany and France upon tax harmonization as unacceptable to Slovakia. This is the limit that cannot be overstepped given Slovakia’s interests, in her words.
France and Germany called on Tuesday for a „new economic government“ for Europe, with mandatory balanced budgets enshrined in the constitutions of all euro zone members as a way to overcome the debt crisis that has threatened to fracture the continent’s fragile common currency. The EU greeted the initiative. „The proposals made today by President Sarkozy and Chancellor Merkel are a welcome step forward in our common efforts to strengthen the governance of the euro area,“ EU Commission President Jose Manuel Barroso and EU Economic Affairs Commissioner Olli Rehn said in a statement.
Sarkozy called for a “new economic government” for Europe that would meet at least twice a year with European Union President Herman Van Rompuy as its head, but he offered few other details or indications that the body would have real power. The summits would be held twice a year. The two leaders will appeal to their EU partners to introduce a financial transaction tax.
Both leaders said the moment was not right to replace 17 government bonds with a single one allowing weaker economies to borrow in cooperation with the powerhouse economies of France and Germany. Merkel and Sarkozy also called for all euro zone nations to enact constitutional amendments requiring balanced budgets. They said they want the process completed by the summer of 2012, but it would almost certainly run into protracted political difficulties in many countries.
SITA