Germany and France say debt talks advancing

@CNNMoneyInvest January 9, 2012: 12:09 PM ET
merkel sarkozy

French President Nicoals Sarkozy and German Chancellor Angela Merkel discuss ways to resolve the eurozone debt crisis.

NEW YORK (CNNMoney) -- The leaders of France and Germany said Monday that progress has been made on last month's proposed deal aimed at resolving Europe's debt crisis.

The fiscal pact, designed to ensure that governments do not spend beyond their means and rack up unsustainable debts, could be signed later this month and go into effect as early as March, said German Chancellor Angela Merkel, following a meeting with French President Nicolas Sarkozy in Berlin.

Sarkozy stressed that eurozone governments should stand by their commitments to reduce deficits, adding that the agreement could be signed in the "coming days."

The terms of the pact include, among other things, a balanced budget requirement with an "automatic correction mechanism," and a provision to make national budget policies subject to EU authority "ex ante," or before the fact.

The political leaders of the 17 eurozone nations, which share the embattled single euro currency, agreed in principle to abide by the pact following a summit on Dec. 9. But the agreement is still subject to parliamentary approval in some member states.

European Union leaders will meet Jan. 30 in Brussels for their first political summit of the year as they struggle to find solutions to the debt problems at the center of Europe's economic and financial crisis.

Europe's debt crisis: 'No clear end in sight'

Merkel and Sarkozy, the leaders of the eurozone's largest economies, also reiterated their commitment to the euro currency and pledged to revive the continent's ailing economy.

"We believe in the Euro, we believe in Europe and must do everything to increase its competitiveness and foster job growth," said Merkel.

The leaders said that Greece, the nation at the heart of the crisis, should remain a member of the currency union. But they called on the government of Lucas Papademos to push through reforms necessary to secure the latest installment of bailout money for Greece.

Merkel and Sarkozy reiterated their support for an agreement with private sector banks and investors to "voluntarily" reduce the value of Greek government bonds by 50%, which has yet to be finalized. But they cautioned that the so-called haircuts will not be enough to solve the nation's economic and debt problems.

The leaders also discussed a proposed financial transaction tax, which France has championed as a way to overcome the crisis.

Sarkozy said the tax would never be implemented globally unless Europe and France take the first step. Critics say imposing a tax on financial transactions, such as trades of stocks or other assets, would drive capital away from European markets.

Merkel advocated imposing the tax locally, either across the European Union or euro area. To top of page

Index Last Change % Change
Dow 17,804.80 26.65 0.15%
Nasdaq 4,765.38 16.98 0.36%
S&P 500 2,070.65 9.42 0.46%
Treasuries 2.18 -0.03 -1.27%
Data as of 7:26pm ET
Company Price Change % Change
Bank of America Corp... 17.62 0.09 0.51%
Apple Inc 111.78 -0.87 -0.77%
General Electric Co 25.62 0.48 1.91%
Intel Corp 36.37 -0.65 -1.76%
Microsoft Corp 47.66 0.14 0.29%
Data as of Dec 19
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.01%4.03%
15 yr fixed3.12%2.97%
5/1 ARM3.11%2.99%
30 yr refi4.04%4.09%
15 yr refi3.15%3.05%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.