Further to a working meeting held in Brussels, European Commission President, José Manuel Barroso, and Commissioner for economic and monetary affairs, Olli Rehn, expressed Commission's satisfaction about the proposals made by President Sarkozy and Chancellor Merkel, as a step forward in the common efforts to strengthen the governance of the Euro area.

The proposals put forward by President Sarkozy and Chancellor Merkel include the establishment of a real economic government in the Eurozone which would be made up with the participation of the Heads of State and Government and will meet at least twice a year. A president for such body would be elected for a period of two and a half years. President Sarkozy and Chancellor Merkel have suggested Mr. Herman Van Rompuy as president for this European economic government.

The proposals also includes the requirement for members of the Eurozone to include in their Constitutions before Summer 2012 the golden rule for budgetary balance for their yearly budgets. This inclusion should lead to the reduction of deficit and public debt. As third measure, France and Germany will present in September a proposal to the European Union aimed at imposing a European financial tax.

President Barroso and Commissioner Rehn consider these proposals as an important political contribution by the leaders of the two largest Euro area economies to the debate and the on-going work. In their view, a shared currency implies shared responsibility and demands closer coordination of economic policies. In this context, a regular format and frequency for the Euro area summits, with a permanent chair, contributes to a more stable and stronger political leadership.

Regarding the rule for balanced budgets, the Commission considers it as a cornerstone of the Stability and Growth Pact, highlighting the substantial strengthening of rules and enforcement which has been proposed and should be finalised in September together with the European Parliament. The call to enshrine the principle of a debt brake in national constitutional law is a further strong political commitment to the long-term sustainability of public finances.

Finally, President Barroso and Commissioner Rehn statement sees a financial transaction tax as a key instrument to ensure that the financial sector makes a fairer contribution to public accounts, and expressed Commission's will to make a proposal in this sense, as previously announced.