Amid growing concerns that the debt crisis in Greece could spread to other heavily-indebted nations in the region, Germany and France have called for reinforcing economic policy coordination and better internal surveillance to prevent a recurrence of a similar crisis.
Just dealing with the Greek debt crisis alone will not be enough to "preserve the success story" of Europe's economic and monetary union, Chancellor Angela Merkel and French President Nicolas Sarkozy said in a joint letter to the European Commission president and their euro zone partners on the eve of an emergency summit of euro group heads of state and government in Brussels on Friday.
"We need to go further in drawing up lessons from the crisis and in taking all necessary measure to make sure that such a crisis will not happen again," the two leaders said. "It is our duty to preserve the benefits of the euro. This implies that we reinforce the coordination of our economic policies and the internal surveillance mechanism of the euro area so that each country shares responsibility for the stability of the euro," they said.
The summit has been convened to formally endorse the three-year 110 billion-euro financial aid package to rescue Greece from bankruptcy, which was agreed by the finance ministers of the euro zone nations and the International Monetary Fund last Sunday.
Europe's two largest economies Germany and France will shoulder a major part of the bailout burden by paying up to 22.4 billion euros and 16.5 billion euros respectively out of the euro zone nations' share of 80 billion euros while the remainder will come from the IMF.
"This decision will allow Greece to take the necessary measures to put its public finances and its economy back on a sustainable path and ward off threats to the financial stability of the euro area as a whole," Merkel and Sarkozy said.
Expressing their "full support" for the Greek government's tough austerity measures, they said they are convinced that these efforts will allow Greece to address its fiscal and economic challenges and restore market confidence.
They called upon their euro zone partners to consider reinforcing fiscal surveillance within the euro area, including a provision for more effective sanctions against those members who repeatedly violate the group's stability criteria.
Alongside these measures, steps should also be taken to strengthen the regulation of financial markets.
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