Victory for Merkel over fiscal treaty

Twenty-five of the European Union’s 27 countries have signed up to a German-inspired treaty enshrining tougher fiscal rules to help underpin the euro.

But Berlin was warned that there were limits to how much sovereignty governments could be expected to surrender for the sake of fiscal discipline.

Nicolas Sarkozy, the French president, said the German proposal for the EU to control Greece’s budget decision-making “would not be reasonable, not be democratic nor would it be effective”. He said that he had confronted Angela Merkel, his German counterpart, with his views and insisted she had agreed.

“The recovery process in Greece can only be enacted by the Greeks themselves, democratically,” Mr Sarkozy said. “There can be no question of putting any country under tutelage. Having spoken to the chancellor, I can tell you this is exactly her position.”

Continue reading article: Victory for Merkel over fiscal treaty (Financial Times)