BUSINESS

Germany presses for euro strugglers to implement deficit pledges as Merkel, Sarkozy meet

01/09/2012 07:35 EST | Updated 03/10/2012 05:12 EST
BERLIN - The leaders of France and Germany said boosting economic growth in the 17-nation eurozone is a priority in their efforts to stem the debt crisis that's shown signs of spreading.

Following a meeting in Berlin Monday with French President Nicolas Sarkozy, German Chancellor Angela Merkel also urged Greece and its private creditors to quickly agree the restructuring of the country's national debt.

Otherwise, she warned it would not be possible for Greece to receive its next batch of bailout cash. In October, the eurozone agreed a second bailout for Greece that involves the country's private creditors accepting a 50 per cent reduction in the value of their holdings of Greek debt.

She added that both she and Sarkozy want Greece to receive the money.

"We want for Greece to remain in the eurozone," Merkel said.

The two leaders also called for payments into the 17-nation eurozone's permanent rescue fund, the European Stability Mechanism, to be speeded up in an effort to bolster confidence, and for a quick conclusion to negotiations on a new treaty enshrining fiscal rules.

Germany has insisted on austerity measures in the so-called eurozone's fight to lower budget deficits and regain investor confidence. Europe is working to hammer out a new treaty enshrining tougher fiscal rules, which leaders agreed at a summit in early December.

Merkel added that resolving the crisis will be "step-by-step ... there's no single-dimension solution."

They also told reporters that Europe should compare countries' labour market practices and learn from the best, and for European funds to be used in a way that could create jobs.