Tougher euro

The European Union will be put to the test unless it tightens the measures in its Stability and Growth Pact, according to German Foreign Minister Guido Westerwelle.

Westerwelle said in a keynote speech to the German Council on Foreign Relations (DGAP) in Berlin on Thursday that he was worried about Europe, "because we will lose the people's support if we simply proceed with our agenda after this crisis."

In renewed criticism of an agreement between Chancellor Angela Merkel and French President Nicolas Sarkozy to drop demands for automatic sanctions on countries that breach the eurozone's deficit ceiling, Westerwelle urged political cooperation across Europe to toughen the Growth and Stability Pact.

"It is crucial that sanctions are not subjected to political opportunism," Westerwelle said.

Merkel's decision seemed to take Westerwelle and other members of the governing coalition by surprise, but she insisted on Thursday that she and Westerwelle were on the same page regarding the proposal.

"We are completely in agreement," Merkel said, "that we should get a clear mandate for devising treaty changes by early next year, so these can be implemented by individual states by 2013."

Previously, Merkel had supported the idea of more automatic sanctions that would take politics out of the equation, and her change of tune is seen by some as caving in to pressure from France.

'More sanctions, please'

Westerwelle also warned against isolationist politics within the EU's 27 member nations, saying that another financial crisis could ruin the fruits of decades of European politics.

"That's why it's so important that we act consistently and decisively in the interest of Europe's inner cohesion," he said. "A hard euro can't tolerate soft rules."

Westerwelle referred to the 22 proceedings brought against EU member states for acute deficits in the past few years. He said sanctions had not been applied in a single one of these cases.

The foreign minister called for a mechanism to place sanctions on countries with bulging deficits, including bigger EU states. The eurozone, Westerwelle said, needed such a system to be consistent and ensure impartiality.

"It makes a big practical difference if sanctions are passed by a two-thirds majority, or blocked by a two-thirds majority," he said.

Westerwelle also countered those who might express discouragement with the European common currency, stressing that re-nationalization was not an option in the wake of the Greek debt crisis.

Author: David Levitz, Matt Zuvela (AP, dpa, Reuters)

Editor: Ian P. Johnson