Bloomberg News

French Official Denies Report EU Discussing Smaller Euro Area

November 09, 2011

Nov. 10 (Bloomberg) -- A French government official said there are no plans to shrink the 17-nation euro region, denying a Reuters report.

Speculation about such a step is ridiculous, said the official, who spoke on condition of anonymity. Germany’s Finance Ministry said that while moves to bolster the currency region during the sovereign debt crisis are being studied, “rumors” of further steps are “unfounded.”

Reuters reported yesterday that discussions among policy makers in Berlin, Paris and Brussels have raised the possibility of one or more country leaving the euro area, citing officials. Luxembourg Prime Minister Jean-Claude Juncker, who chairs meetings of euro-region finance ministers, told reporters in Lisbon late yesterday that the euro area should stay together and it is “not time for us to subdivide into national categories.”

German Chancellor Angela Merkel and French President Nicolas Sarkozy first raised the prospect of a member state leaving the euro last week, when they withheld aid for Greece and said that a planned Greek referendum on its bailout would be an in-or-out vote on euro membership. Greek Prime Minister George Papandreou later pulled the ballot.

The German Finance Ministry, in a statement e-mailed late yesterday responding to the Reuters report, said that on Oct. 26 euro-area leaders asked European Union President Herman van Rompuy, European Commission President Jose Barroso and Juncker to present them with an interim report “including a time frame for the further strengthening of the euro zone.” The report, to be presented at their next meeting in December, should include “the question of possible treaty changes,” the ministry said.

“This discussion is to be continued in March 2012 in a report on how these treaty changes can be implemented,” the ministry said. “This is being worked on. All rumors going beyond this are unfounded and wrong.”

To contact the reporters on this story: Mark Deen in Paris at markdeen@bloomberg.net; Rainer Buergin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net


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