Germany and France will push for a broad treaty "refounding and rethinking the organization of Europe," French President Nicolas Sarkozy declared Thursday. He said that without some new "convergence" among European countries, the continent's crushing debt could destroy the euro.
Sarkozy made the statements in the southern French port city of Toulon as he and German Chancellor Angela Merkel prepare to meet in Paris on Monday to try to lift Europe out of the debt crisis ahead of a major EU summit next week. Earlier Thursday, the head of the European Central Bank hinted that the ECB now may be willing to take bolder actions to address the crisis that has rocked the continent.
"There can be no common currency without economic convergence without which the euro will be too strong for some, too weak for others, and the eurozone will break up," the French president said before an audience of several thousand sympathizers of his conservative party.
Today, Merkel will address Germany's parliament about Europe's financial crisis and the EU summit on Dec. 9, which is expected to focus on how to make the eurozone more unified.
Merkel has acknowledged the need for treaty changes that impose stricter financial controls on eurozone countries to prevent them from taking on too much debt.
German Finance Minister Wolfgang Schaeuble told reporters in Berlin on Thursday there is now "a crisis of confidence" in the eurozone and that tough and credible new rules are needed to regain market confidence. Germany has said EU treaty amendments are required to do that.
Sarkozy spoke a day after the European Central Bank, the Federal Reserve and the central banks of Canada, Japan and Switzerland moved together to make it easier for commercial banks to borrow American dollars. The move was intended to calm financial markets, which had grown increasingly worried about European debt.
Seventeen countries share the euro, and those countries plus 10 more make up the European Union. All 27 would have to approve a change in the Maastricht Treaty, which created the euro in 1999. Sarkozy said the treaty "has revealed itself to be imperfect."
A disorderly breakup of the euro would devastate the world economy, analysts predict, and could trigger a replay of the stock market crash during the last world financial crisis, in 2008.