Euro zone’s big four reiterate call for closer political collaboration

Leaders of the four biggest economies of the euro zone reiterated earlier calls for closer political collaboration and the creation of a regionwide banking union, as they met for a pre-summit meeting in Rome yesterday.

The four leaders, German chancellor Angela Merkel, French president Francois Hollande, Spanish prime minister Mariano Rajoy and Italian prime minister Mario Monti, were all in agreement that euro area needed to work together to control public deficits, sustain growth and employment and to move closer to a fiscal union.

According to Rajoy, the euro was irreversible. The four leaders agreed "to put all the mechanisms into motion to achieve financial stability" and to work toward better economic and financial integration, with Merkel saying that the ideas crafted at the meeting in Rome would be presented for the rest of the member states at the EU Summit on 28 – 29 June.

They announced that 1 per cent of the EU's GDP would be set aside to help the continent grow out of the financial crisis. However, doubts were immediately voiced as to what share of the package – said to be worth €130 billion - would be genuinely new money.

Several hours of discussions on Thursday had failed to bring about an agreement on a plan outlined by Italy's prime minister, Mario Monti, which was aimed at stabilising Europe's banks and protecting countries under attack in the markets.

Rajoy had later said there was an agreement between the leaders to use any necessary mechanism to obtain financial stability in the euro zone.