France and Germany are pushing for changes to the EU treaty which would see EU member states subject to the same financial regulation and the creation of a financial transaction tax.
A joint letter to the European Council president Herman Van Rompuy from French President Nicolas Sarkozy and German Chancellor Angela Merkel sets out more details on the treaty change they would like to see to address fears overs the eurozone debt crisis.
Sarkozy and Merkel agreed broadly to EU treaty change earlier this week.
An English translation of the letter, published on Reuters today, says there should be more “binding and more ambitious rules and commitments for the Euro area member states”. The letter goes on to say that France and Germany will work to introduce the agreement across the EU “as soon as possible”.
Sarkozy and Merkel write there needs to be “greater convergence of economic policies at least amongst Euro area member states”.
The letter calls for a “new common legal framework” for areas such as financial regulation, and the creation of a financial transaction tax. Other areas include labour markets and growth policies.
It also proposes there should be “automatic consequences” when member states breach a 3 per cent deficit of GDP.
Prime Minister David Cameron has said he will not sign any new EU treaty without safeguards to protect the UK’s interests and those of the UK financial sector.
In last month’s autumn statement, Chancellor George Osborne defended the Government’s decision to reject the European Commission’s proposal for a financial transaction tax, saying it would be a tax on individual savers not banks. He said the tax must be rejected to ensure the UK remains at the centre of the global financial system.