EU Leaders, Finance Ministers Prepare For 'Crunch Summit'
Wolfgang Schaeuble will formally present his proposal for national redemption funds at a "crunch summit" Dec. 9. Under his plan, each nation would take a portion of their respective debts and repay it over the course of 20 years, all the while working to keep debt levels on target, according to a Reuters report. Ideally, Schaeuble said, the debt would be reduced to 60 percent by the end of that period.
Schaeuble's proposal has already come up against opposition. Austrian Finance Minister Maria Fekter said national parliaments would challenge any suggestion that would seek billions of euros from taxpayers.
German Chancellor Angela Merkel has expressed approval for the plan, but it's unclear whether she'll continue to endorse it, especially as she meets with French President Nicolas Sarkozy on Monday.
Reuters reported Merkel is focused on holding euro zone leaders responsible in abiding by budget rules.
Merkel's spokesman dismissed a report in Focus magazine which said Germany and France would if necessary let the euro zone break up and make agreements with individual governments if treaty changes could not be agreed between all members.
"The German government's goal is to strengthen stability in the euro zone as a whole through a common set of rules for stricter budget discipline," the spokesman told Reuters.
The German government wants as many members as possible of the 27-member EU to sign up to the changes. British Prime Minister David Cameron threatened on Friday to obstruct the Franco-German drive for swift EU treaty change.
Schaeuble reiterated Germany's opposition to common euro zone debt issuance in the newspaper interview, as did Economy Minister Philipp Roesler, leader of the Free Democrats (FDP), a junior partner in Merkel's centre-right coalition.
He told the Frankfurter Allgemeine Sonntagszeitung that there would be no euro bond under this government.
Schaeuble also reiterated Germany's stance that the European Central Bank was independent.
Former European Commission head Jacques Delors blamed Germany for insisting the ECB must not support debt-stricken members of the euro zone for fear of fueling inflation in an interview with Britain's Daily Telegraph.
The euro's troubles spring from "a combination of the stubbornness of the Germanic idea of monetary control and the absence of a clear vision from all the other countries," he said.
U.S. Secretary of the Treasury Tim Geithner will also attend the summit next week, a trip The Financial Times said is evidence of American unease with the worsening debt crisis in Europe.
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