EU risks being split apart, says Sarkozy

 

EU SUMMIT:FRENCH PRESIDENT Nicolas Sarkozy warned that the European Union had never been closer to breaking apart as Paris and Berlin turned up the pressure on European leaders to agree to an overhaul of the EU treaty.

Mr Sarkozy and German chancellor Angela Merkel are hoping to overcome resistance from a number of states to win agreement for their plan to insert tougher sanctions for budget rule-breakers in the EU treaty.

In a broadly conciliatory speech, the French president called for a “spirit of compromise” among EU leaders but warned that Europe was in an “extremely dangerous situation” that demanded immediate action.

“If we don’t have an agreement on Friday, there won’t be a second chance . . . Europe has never been closer to exploding,” he said.

Mr Sarkozy was addressing the annual congress of the centre-right European People’s Party in Marseilles, where intense diplomatic activity continued in the build-up to the Brussels summit.

Dr Merkel told the congress she was “sure that at the end of the day we will have a result”. She stressed the crisis would not be brought to an end “with one fell swoop”, however, but would take “years of hard work”.

“No one believes words any more, because we haven’t lived up to our words before,” she said.

The chancellor said states would have to accept that the European Commission would receive more power under a new treaty.

“We will have to bow to the will of the commission more than in the past, when member states, even Germany, watered down the rules. And that’s what’s at stake [in Brussels].” Summit chairman Herman Van Rompuy is urging leaders to avoid a laborious treaty overhaul that could take up to two years and face uncertain ratification. He wants them instead to adopt stricter budget enforcement through a protocol to existing treaties.

That idea has been firmly rejected by Berlin, and Mr Sarkozy dismissed it as insufficient yesterday. “Who among you can return to your countries and say, ‘we understand [the scale of the problem] but nothing needs to change’,” he said in his speech.

Commission president José Manuel Barroso predicted a compromise would be reached and said more “shared sovereignty” was required.

“All the world is watching us. And what the world awaits from us is not more national problems but European solutions,” he said. “It is extremely important that we all together, all the EU, show that the euro is irreversible.”

France and Germany have said their preference is to secure a deal among all 27 EU states, but they are open to proceeding within the 17-country euro zone if that’s not possible. Britain’s suggestion that its support for any treaty change deal will be contingent on its extracting concessions of its own is seen as one of the main obstacles to an EU-wide agreement.

Swedish prime minister Frederik Reinfeldt, whose country is also outside the single currency area, said he was open to discussions on better fiscal discipline and urged his counterparts not to go down the road of a two-speed Europe. “We respect that the euro zone wants their own meetings and take part of the responsibility on their own,” he said.

“But we want to stick with the 27 concept of course because all of us are members of the European Union and we want to have our influence. We want to keep the European project together.”

Mr Reinfeldt stressed that calming the turmoil in markets with a stronger financial firewall was more urgent than treaty change. “Additional changes in treaties that might take a longer time might be needed but I don’t think that’s the solution that markets following us are actually looking for,” he said.