France gets backing for Euro government

FRENCH-inspired plans to create an “economic government” for the Eurozone took a step forward yesterday when European Council president Herman Van Rompuy threw his weight behind the idea.

The move raised pressure on Germany, Europe’s biggest economy and chief crusader for tougher budget discipline, to accept a new political forum to coordinate economic policy, made up of leaders of the 16 nations that share the single currency.

France has long pressed for a more formalised system of coordinating economic policy but the idea has been treated with scepticism by some partners, notably Germany. Berlin fears a challenge to the independence of the European Central Bank and is wary of state intervention in the market economy.