German
Chancellor Angela Merkel
and French President Nicolas Sarkozy plan to drive forward their agenda for
stricter budget rules as they seek to craft a master plan for rescuing the euro
over the next three months.
The
euro rose as the two leaders met in Berlin to flesh out a rulebook for
budgetary discipline negotiated at a Dec. 9 summit that seeks to create a
“fiscal compact” for the 17-member euro area. At their first meeting of 2012,
they also plan to discuss a financial-transaction tax, progress on Greece’s
second bailout and a Jan. 30 European summit that will focus on bolstering
growth, the German government said.
The
German and French leaders have sponsored a plan to draw up new fiscal
guidelines by March to resolve a crisis that began in Greece more than two years
ago. As the contagion moves to the euro-area’s core, policy makers are
struggling to persuade investors they can contain the risk and assure the
single currency’s survival.
Fixing
the crisis requires more “German largesse” through the current bailout
programs, Goldman Sachs Group Inc. Chief European Economist Huw
Pill told a conference in London
on 9 January 2012. “Starting with Mrs Merkel’s meeting with Mr Sarkozy, it’s
important we do start to see some progress.”