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Euro-MPs slam Franco-German eurozone 'pact'

Euro-MPs slam Franco-German eurozone 'pact'

Herman Van Rompuy - Photo EP

(BRUSSELS) - Top European Parliament MPs attacked Tuesday a Franco-German drive for closer economic policy coordination in the eurozone as an attempt by the two powers to impose their will on the bloc.

The lawmakers voiced their discontent after European Union president Herman Van Rompuy briefed them on the outcome of last Friday's EU summit where plans to protect the euro from future debt shocks were debated.

Guy Verhofstadt, the Belgian leader of the Liberal group, charged that the Franco-German "pact" was part of a "secret deal" under which a eurozone debt crisis fund would only be reinforced if the Berlin-Paris proposal is accepted.

"The one is linked to the other," Verhofstadt said at a meeting attended by parliament leaders to hear Van Rompuy.

"I'm saying this is very dangerous. It is playing with matches while sitting on a haystack and the haystack are the financial markets today," he said.

Socialist bloc leader Martin Shulz accused German Chancellor Angela Merkel's government of trying to "export its austerity programme in every European country."

Shulz warned that one of the pact's proposals -- to scrap laws linking wage rises to inflation within the 17-nation euro-area -- would "add a crisis to the existing crisis."

Lawmakers also voiced concern about the 27-nation bloc turning into an "inter-governmental" organisation.

Joseph Daul, the head of parliament's biggest group, the conservative European People's Party, said his group "believes the solution to our problems is not clashes between members states but joint solutions."

Van Rompuy denied that "any plan" was actually put on the table at the summit and said a "full package" of measures to underpin euro stability would be approved by heads of state and government at the next EU summit in Brussels on March 24-25.

"The outlook of the European economy has substantially improved, including in the eurozone countries which recently were in difficulty," he told the lawmakers.

"However, we are aware that there is still a lot of homework to do. It is not the time for complacency. We will draw the lessons from the crisis. We decided to use the momentum to adopt the comprehensive package in March."

The 17 eurozone leaders will meet on March 13 in preparation for the full EU summit later that month, a diplomatic source said.

The Franco-German plan will likely be discussed then.

European leaders also want to boost the 440-billion-euro ($600 billion) European Financial Stability Facility (EFSF), a rescue fund set up last year in the wake of the Greek bailout to lend money to distressed economies.

Further information, European Parliament

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