Business, Finance & Economics

Germany, France "discussing EU overhaul"


Protesters dressed as German Chancellor Angela Merkel and French President Nicolas Sarkozy demonstrate in Berlin on Oct. 21, calling on more spending to alleviate poverty, rather than to bailout banks. At the same time, the German Bundestag debated the European Stability pact, ahead of summit of EU leaders in Brussels that aims to thrash out a solution to the eurozone debt crisis.


John MacDougall

Officials in Germany and France are reported to be mulling a radical overhaul of the European Union towards a more economically integrated – and perhaps smaller – euro zone.

Speaking on condition of anonymity, a senior EU official in Brussels told Reuters that France and Germany had had “intense consultations on this issue over the last months, at all levels".

The source said:

"We need to move very cautiously, but the truth is that we need to establish exactly the list of those who don't want to be part of the club and those who simply cannot be part."

The discussions raised the possibility of one or more countries leaving the euro zone, and reportedly took place among senior policymakers in Paris, Berlin and Brussels.

Speaking to students in Strasbourg on Tuesday, French President Nicolas Sarkozy spoke of a “two-speed Europe” model for the future, in which the euro zone would advance more rapidly than the other 27 countries in the EU.

Read more on GlobalPost: What would happen if Greece left the euro zone?

It has become apparent that the euro zone's first financial crisis has generated a debate about the bloc's future, the BBC reported.

The German Chancellor Angela Merkel said Berlin aimed to "stabilize the euro zone in its entirety", and her office has denied plans to reduce the size of the zone.

European Commission President Jose Manuel Barroso warned about the economic dangers of dividing euro zone, while an EU diplomat told Reuters that a radical overhaul of the European Union would be widely opposed by many members.