Germany's Merkel fights for euro, Cameron for UK

Fri Dec 2, 2011 3:54pm EST
 
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By Catherine Bremer and Stephen Brown

PARIS/BERLIN (Reuters) - British Prime Minister David Cameron threatened on Friday to obstruct a Franco-German drive for swift change to the European Union's treaty, a sign of the difficulty leaders will face transforming Europe to save the euro.

France and Germany are reaching a consensus that euro zone economies need to be bound more closely together if the single currency is to survive, which could mean changing the EU treaty to give Brussels powers to punish spendthrift euro states.

Austrian Chancellor Werner Faymann said there was a danger that the euro zone bloc would split up unless it implemented new rules and stuck to them.

"When we are not able to set up and keep to more conditions and ground rules, then many countries in the euro zone will no longer be able to pay the very high rates for sovereign bonds," he told the daily Krone.

"The next effect will be that you won't find anyone to buy them. Then the euro zone has to break up because of this.... it is a very real danger."

After talks with French President Nicolas Sarkozy, Cameron said he was not convinced treaty change was needed to reinforce the single currency zone, which Britain has refused to join. If the 27-nation bloc's charter were reopened at a crunch summit on December 9, he would have his own agenda.

The British leader said euro zone institutions such as the European Central Bank needed to "get behind the currency" to convince markets that it had the required firepower, and member states had to make their economies more competitive.

"Neither of those things require treaty change, but if there is treaty change I will make sure that we further protect and enhance Britain's interests," he told reporters. There was no immediate comment from Sarkozy's office.   Continued...