Following are highlights of a news conference by French President Nicolas Sarkozy and German Chancellor Angela Merkel following bilateral talks in Paris to hone joint proposals for more central control of euro zone budgets.
PRESIDENT NICOLAS SARKOZY
The Franco-German agreement is very complete. It will be written up in a letter and presented to (European Council President) Herman Van Rompuy on Wednesday.
We want to make sure that the imbalances which led to the situation in the euro zone today cannot happen again.
Things cannot continue as they have done up until today. Our preference is for a treaty among the 27 (EU members), so that nobody feels excluded, but we are open to a treaty among the 17 (euro members), open to any state that wants to join us.
This treaty would contain the following things: We want automatic sanctions in the event of a breach of the rule on deficits below 3 percent (of GDP).
We want a golden rule that is reinforced and harmonized on the European level so that the budgets of all 17 (euro zone states) have a constitutional rule to ensure that national budgets move toward a return to equilibrium.
GERMAN CHANCELLOR ANGELA MERKEL
It is very important that we work as closely together as possible... We are in a difficult situation and we need to regain trust, as the belief that we can be taken at our word has suffered.
That is why at the summit we need to regain some of this confidence and trust in our word. We want structural changes which go beyond agreements. We need binding debt brakes, which can be verified by the European court of Justice ... in order for the Stability and Growth Pact to hold.
We are open either to changes to the treaties for the 27 but also for the 17 euro zone members if necessary.
Regarding what we have said about the ECB, nothing has changed. We reject the idea of euro bonds.
This package shows that we are absolutely determined to keep the euro as a stable currency and as an important contributor to European stability.
(Reporting by Vicky Buffery and Nicholas Vinocur)