French President Nicolas Sarkozy and German Chancellor Angela Merkel meet in Paris on Monday, December 5, under pressure to align their positions on centralizing control of euro zone budgets to stem a debt crisis that threatens Europe's currency union, Reuters reports.
After individually outlining their views last week on closer fiscal integration, the two leaders must overcome remaining differences in order to fine tune proposals they want to present to EU leaders in Brussels Thursday, on the eve of a summit.
The duo, increasingly dubbed "Merkozy" as they intensify bilateral efforts to restore confidence in the battered euro zone, will meet over lunch at 1:30 p.m. (7:30 a.m. EST) Monday and are expected to hold a news conference afterwards.
They aim to agree proposals for more coercive budget discipline in the euro zone, likely via treaty change, which they want all 27 EU leaders to approve at Friday's summit.
Financial markets rallied last week after central banks took action to provide funding for European banks and on hopes of a Franco-German masterplan. European Central Bank chief Mario Draghi signaled that a euro zone "fiscal compact" could nudge the bank to act more decisively to fight the crisis.
The sticking point is that while Merkel wants euro states to surrender budgetary control to a European authority with veto power, which would require changing the EU treaty, France wants governments to have control of imposing sanctions on slackers.
While Germany, fed up with costly bailouts, wants a more federal EU system, Sarkozy is under fire five months from a presidential election from political rivals who accuse him of being ready to hand over sovereignty to unelected EU officials.
