French (NYSE:EWQ) President Nicolas Sarkozy says that he and German (NYSE:EWG) Chancellor Angela Merkel want a “true European economic government” that would consist of heads of government from all euro-zone nations. The new body that would meet twice a year, and more if necessary, is the result of a meeting Tuesday between the two leaders of the euro zone’s two largest economies.
Sarkozy suggested in a news conference today following his meeting with Merkel that the new body be led by EU President Herman Van Rompuy for a two-and-a-half-year term, after which he suggests it could be opened to other heads of state. The body would be a large move toward unifying the finances of the seventeen EU nations that share a common currency.
Sarkozy and Merkel have suggested that, to avoid debt crises and defend the common currency, all euro zone countries should have mandatory balanced budgets and better coordination of economic policy. The two have pledged to harmonize their own countries’ corporate taxes as an example for other euro-zone nations.
Neither Merkel nor Sarkozy suggested any short-term solutions to the debt crises currently plaguing the region. Merkel said the crisis had been building over several years, and that it will take time and “stronger coordination of financial and economic policy” in order to protect the euro.