France and Germany agree new rules / S&P downgrade threat reveals frustrations

nullFrance and Germany reached a 'comprehensive' agreement on new fiscal rules for the beleaguered eurozone at a meeting in Paris on the 5 December 2011, as a package of measures designed to save the single currency begins to take shape.

The Franco-German agreement was welcomed by financial markets. However, later on the same day financial markets came under renewed pressure after credit rating agency Standard & Poor’s plans to put all 17 eurozone members on review for a downgrade became apparent.

Paris and Berlin issued a joint statement on the S&P review, saying that they reaffirmed their proposals to reinforce fiscal governance in the eurozone.

Meanwhile, Poland vowed to fight for the EU's unity in the face of an emerging two-speed Europe. The Polish EU Presidency issued a report 'Preserving the integrity of the European Union while strengthening euro area governance'.

EurActiv, 6.12.11: EU unity at stake as Paris, Berlin unveil euro plan http://www.euractiv.com/euro-finance/eu-unity-stake-paris-berlin-unveil-euro-plan-news-509461

ESO: Background information: Clash of styles in race to save single currency http://www.europeansources.info/record/clash-of-styles-in-race-to-save-single-currency-battle-of-wills-rages-over-european-fiscal-rules/

EurActiv, 5.12.11: Franco-German differences persist ahead of EU proposals http://www.euractiv.com/euro-finance/franco-german-differences-persist-ahead-eu-proposals-news-509424

BBC News, 5.12.11: Eurozone: France and Germany call for tougher treaty http://www.bbc.co.uk/news/world-europe-16037425

EUObserver, 5.12.11: Franco-German fudge would see EU court judge budget discipline http://euobserver.com/19/114511

Deutsche Welle, 5.12.11: Downgrade threat grows as Merkel, Sarkozy plan new EU treaty http://www.dw-world.de/dw/article/0,,15580243,00.html

ESO: Background information: Brussels to unveil curbs on rating agencies http://www.europeansources.info/record/brussels-to-unveil-curbs-on-rating-agencies-barnier-backtracks-on-ratings-reforms/

France24, 6.12.11: Standard & Poor's warns of mass eurozone downgrade http://www.france24.com/en/20111206-standard-poors-mass-eurozone-downgrade-credit-debt-france-germany-economy

France24, 5.12.11: Sarkozy, Merkel to push for new European Union treaty http://www.france24.com/en/20111205-sarkozy-merkel-push-new-eu-treaty-eurozone-debt-crisis-talks-paris-france-germany

Spiegel Online International, 5.12.11: Merkozy to Seek New EU Treaty to Tackle Crisis http://www.spiegel.de/international/europe/0,1518,801858,00.html

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