EU leaders discuss “pact for competitiveness” for the eurozone

3rd February 2011

Germany and France are bidding to launch a new eurozone "pact for competitiveness" at this Friday's EU leaders' summit.

Spiegel Online is already calling it a move towards an "Economic government for the Euro zone".

The deal, pressed for by German Chancellor Angela Merkel and supported by French President Nicolas Sarkozy, would harmonise many more EU financial, economic and social policies and aim to even out retirement ages, corporate taxes and wages.

But comment boards elsewhere on Business Insider are already scathing about the plans and in particular what they would mean for already troubled peripheral eurozone states but also as a result German and French banks.

John Mack says: "Evening out of wages and corporate taxes will consolidate economic activities in Germany and France. This will certainly encourage defaults in the PIIGs. How will these defaults affect German, French banks? Poland, do not join the EURO! It's a death sentence for emerging economies. You see what Germany and France intend to do – make colonies of the remaining Euro states. What is Merkel going to do about the inevitable rise in the price of oil? And increasingly severe winters in Europe?"

kr-invest says: "You think Angela Merkel is not well informed on the amount of debts in the belance sheets??? Besides this, looking at bond prices, Portugese, Spanish and Irish debt mostly is above 0.8. This is even further away from worthless as Greek debt. Even in the case of a haircut, banks and banks shareholders might have to deal with it. I assume politicans are well informed in order to prevent a second Kreditanstalt."

In another Business Insider opinion, Money Game editor Gregory White suggests that Nicolas Sarkozy, unable to implement reform in France himself, hopes the EU can do it for him.

What will other EU leaders say? Roll on Friday.

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