The European Union has launched a nine-day battle for changes to save the debt-ridden eurozone, with the French president saying Europe needs to be "refounded".
Announcing that he will meet German Chancellor Angela Merkel in Paris on Monday, when he will announce a joint plan to solve the debt crisis, Nicolas Sarkozy said he wants a new EU contract.
"Europe must be rebuilt," Sarkozy said, with France and Germany providing a "zone of stability" at its heart.
On Friday, Merkel should present her vision of the functioning of the EU in the German parliament and reveal what its conditions are.
The German-French proposals will be presented at an EU summit on December 9, which is seen as a turning point for the fate of the 12-year-old single currency.
In a key speech on the eurozone crisis in the southern city of Toulon, the French president said he and Merkel will present proposals that should "guarantee" Europe's future, AFP reported.
"Let's not hide it, the crisis could wipe out Europe if it doesn't organize and change," Sarkozy said, warning that the collapse of the euro would send France's debt spiraling out of control and wipe out citizens' savings.
"We have no right to allow such a catastrophe".
Changes to the treaty would have to be ratified by the parliaments of all 27 EU member states, ten of which do not use the euro
"It turned out that the Maastricht Treaty was not perfect," Sarkozy said, referring to the agreement that led to the creation of the euro currency in 1999.
"There cannot be a common currency without economic unification, without which the euro would be too strong for some and too weak for others, and the euro zone would fall apart," Sarkozy said in front of several thousand supporters from his conservative party, the Associated Press reported.
Changes to the treaty would have to be ratified by the parliaments of all 27 EU member states, ten of which do not use the euro.
Sarkozy added that the process of reforming the treaty "will be long and difficult" but that it is necessary to protect Europe's place in the world.
Stricter financial discipline is necessary, Sarkozy added, with stricter sanctions for countries that do not fulfill their obligations, the BBC reported.
He promised, however, that France would not renounce its sovereignty.
Europe's response to the debt crisis was not quick enough
Sarkozy, who is widely expected to seek another presidential term, dismissed talk of an election, saying he had to focus on his dire financial situation.
Berlin wants the EC to be empowered to audit state budgets, before they are discussed in national parliaments, and for disobedient eurozone members to be dealt with by the European Court of Human Rights.
Sarkozy said that Europe's response to the debt crisis was not quick enough.
He has previously expressed his belief that a two-speed EU is inevitable, arguing that full economic integration will be impossible once the EU expands to more than 30 members.
In a speech in November, he said "there will be Europe in two speeds: one speed that goes towards greater integration in the Eurozone and one speed for confederation in the EU".
Sarkozy, who is widely expected to seek another presidential term, dismissed talk of an election, saying he had to focus on his dire financial situation.
The ECB opened the door for action
The new head of the European Central Bank has sent a signal that the institution is ready to fight the debt crisis more aggressively if political leaders agree on much tighter budget controls in the eurozone next week.
EU leaders are expected to better coordinate their spending policies, a measure necessary for the ECB or other institutions to take more aggressive steps to prevent excessive debt from destroying the euro and wreaking havoc on the global financial system.
Mario Draghi
ECB President Mario Draghi painted a grim picture of the state of Europe's banking system, speaking a day after the world's six biggest central banks took joint action to provide cheaper dollar supplies to Europe's impoverished banks.
"The new fiscal contract would be the most important signal for the eurozone governments to initiate a comprehensive deepening of economic integration," Draghi said in the European Parliament, Reuters reported.
He did not specify what action the ECB might take, saying only that political leaders' commitment to tighter budget discipline and better alignment of their economies is "definitely the most important element to start restoring confidence."
In the short term, economists expect the ECB to ease pressure on banks and an economy headed for recession by cutting interest rates next week.
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