Sarkozy, Merkel call for tighter economic governance in euro zone

French President Nicolas Sarkozy and German Chancellor Angela Merkel on Thursday called on the euro zone to reinforce economic governance in the wake of the Greek debt crisis.

"We should ... learn the lesson to take all the necessary measures to avoid a crisis of this nature to reappear," the two leaders said in a joint letter to European Union President Herman Van Rompuy and Jose Manuel Barroso, the head of the European Commission.

"It should be first to reinforce the economic government in the euro zone," Sarkozy and Merkel said ahead of a euro zone summit slated for Friday in Brussels.

The two leaders urged the heads of states and regional governments to reinforce budget surveillance, to expand surveillance to conclude questions related with "structure, competitiveness and imparity" and to create a robust cadre for a resolution of the crisis.

"We should also reinforce the quality control of the statistics," they said, referring to the need for improving the investigating capability of the European statistical bureau Eurostat.

"The absence of the reliability of Greece's statistics explains a large part of the market defiance to the country," the letter said.

Meanwhile, Sarkozy and Merkel pointed out that reaction of the financial market in recent days amplified the crisis, causing a large-scale and baseless fluctuation in interest rates on sovereign debt of several euro zone countries.

In recent months, some international rating agencies that were criticized after the devastating subprime mortgage crisis, continued downgrading the ratings of the sovereign debts of Greece, Portugal and Spain, provoking contagious panic within the euro zone.

The French and German leaders urged better monitoring of rating agencies and called for reconsideration of the rating methodology as well as the ethical roles of the agencies.

They meanwhile suggested to intensify the transparency and security of transactions on financial derivatives and to discourage speculation by introducing capital or collateral requirements to the transaction on not-standardized derivatives.

"The euro is a major achievement of the European Union ... We are fully attached to preserve its solidity, stability and the unity of the euro zone," Merkel and Sarkozy said.

Greece exposed its high risk fiscal troubles last October when the new socialist government took power and revealed its forecast for the public deficit of 2009.

To date, the Greek government is facing an accumulated debt of over 300 billion euros (399 billion U.S. dollars).

On May 2, the 16-member euro zone decided to activate an aid plan to bail out Greece. The plan provides an unprecedented 110 billion euros (about 146 billion dollars), including 80 billion euros (106 billion dollars) provided by the euro zone nations and the rest by the International Monetary Fund.

Source: Xinhua