French-German euro zone blueprint could frustrate Cameron plans

By Andreas Rinke

BERLIN (Reuters) – Germany and France have agreed plans to strengthen cooperation among euro zone countries without changing existing EU treaties, in a potential setback for British Prime Minister David Cameron as he holds key meetings this week with both countries’ leaders.

The blueprint would bolster the 19-nation euro zone, of which Britain is not a member, by holding more regular summits of its leaders, strengthening the Eurogroup forum of finance ministers and establishing euro zone-specific structures within the European Parliament.

It envisages no change to EU treaties. This too could frustrate Cameron, who wants to negotiate far-reaching reform of the European Union before holding a British referendum by the end of 2017 on whether to stay or leave.

The ideas are outlined in a Franco-German paper seen by Reuters, designed for discussion at an EU summit in June. The German government confirmed the existence of the concept, without discussing its details.

The EU Commission should more closely monitor economic developments in the euro zone countries, according to the proposal.

“Further steps are needed to strengthen growth, competitiveness and employment in the euro zone, counter imbalances, ensure solid public budgets and promote economic convergence, so that the euro zone succeeds in maintaining its economic and social welfare model in an increasingly competitive world,” the paper says.

Cameron, re-elected as prime minister on May 7, has pledged to reshape Britain’s ties with the EU to claw back powers from Brussels and win back more national sovereignty in areas like immigration and welfare.

France has ruled out the prospect of the EU changing its founding treaties to suit Britain.

Cameron is due to have dinner in Paris on Thursday with French President Francois Hollande, and hold talks with German Chancellor Angela Merkel in Berlin on Friday.

(Reporting by Andreas Rinke; writing by Erik Kirschbaum; Editing by Mark Trevelyan)

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