Sarkozy, Merkel coordinate euro defense

PARIS, Aug. 16 (UPI) -- Leaders of Germany and France said Tuesday they would tighten coordination of monetary policies, but fell short of endorsing eurozone bonds.

German Chancellor Angela Merkel and French President Nicolas Sarkozy met for two hours in Paris, then announced, as Sarkozy said, "We want to express our absolute will to defend the euro and assume Germany and France's particular responsibilities in Europe," The New York Times reported.

The leaders said their economic ministers would meet four times a year to coordinate policy. They also said they would push for balanced budget amendments for all members of the eurozone, the 17 countries that use the euro as currency.

Sarkozy and Merkel also proposed to coordinate corporate income taxes and to begin taxing financial transactions by 2013.

Sarkozy proposed "a true economic government for the eurozone," that would have current European Union President Herman van Rompuy as its president, who would preside over a council comprised of the leaders of all 17 eurozone members.

The president of the council would serve for two and a half years, Sarkozy said.

Both Merkel and Sarkozy have rejected the notion of a eurozone-wide bond issue, which would require rewriting treaties and likely call for constitutional adaptations in member countries.

"What we are proposing here is the means with which we can solve the crisis right now and win back trust, step by step. I do not think euro bonds will help us in this," Merkel said.