Europe gives mixed response to tough treaty rewrite

(PARIS) - European nations gave a mixed response to France and Germany's demand for a new EU treaty with tougher budgetary rules to deal with the eurozone debt crisis.

Some nations like Poland, current holder of the rotating EU presidency, warned against any change to European Union governance that would put the 27-nation bloc's unity at risk.

Ahead of a debt crisis summit later this week, German Chancellor Angela Merkel and French President Nicolas Sarkozy called for a new EU treaty for either all 27 members or just the 17 eurozone states.

Poland's EU affairs minister Mikolaj Dowgielewicz presented his EU counterparts with a paper calling for the 10 non-euro nations, which include Poland and Britain, to have a seat at the table of eurozone meetings.

"The strengthening of the economic governance of the euro area should lead to a strengthened Union," the document said.

"It should not create exclusive structures that risk deepening potential divisions but be inclusive and based on willingness to cooperate and observe agreed rules."

The French and German leaders backed automatic sanctions against EU member states whose deficits go over three percent of GDP and called for a "reinforced and harmonised golden rule" on the deficits of eurozone states.

The golden rule on deficits could oblige some states to enshrine the commitment to balance their public finances in their constitution or legislation.

The European Court of Justice should be tasked with verifying that national budgets obey deficit rules, but it should not be able to declare budgets "null and void", Merkel said.

Swedish Prime Minister Fredrik Reinfeldt said the existing treaties were broadly adequate.

"We think that much could be done to solve European problems within the existing treaties," he said, stressing that countries with beleaguered finances, such as Italy and Spain, needed to launch major reforms.

"It's impossible to see a solution without tough reforms coming from the countries themselves," he said.

But Finnish EU Affairs Minister Alexander Stubb said the Merkel-Sarkozy proposal for automatic sanctions and greater fiscal discipline was "a step in the right direction", Finnish news agency STT reported.

"Changes in the treaties are one of the subjects on which we will take a decision at the next EU summit," added Danish Prime Minister Helle Thorning-Schmidt.

"We are not scared of treaty change. We will discuss it discuss it willingly and there may also be advantages in ensuring discipline in European countries."

Austrian Foreign Minister Michael Spindelegger said treaty changes "will not be of great help in the short-term but in the long term they will be of great help," to ensure a more efficient EU.

Italy's new Prime Minister Mario Monti, who on Monday presented a tough austerity plan to parliament, warning that Rome risks a Greek-style "collapse" if it is not adopted, said his country would "have a role in the debate" on treaty modifications.

Monti said one of the priorities of his government would be to follow "relations between the eurozone and the other countries of the European Union," stressing he "feared divisions" in the heart of Europe.

British Prime Minister David Cameron meanwhile moved to quash speculation that London would hold a referendum on proposed changes to EU treaties, rejecting calls from his Conservative party's right wing.

Under legislation passed last year, the non-eurozone member must hold a referendum on changes in the European Union if they involve a significant transfer of power from London to Brussels.

"If there is a treaty at the level of 27, and if that passed powers from Britain to Brussels, there would be a referendum," Cameron told reporters.

But he added: "As prime minister I am not intending to pass any powers from Britain to Brussels, so I don't think the issue will arise."

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