The European Union needs “an overhaul,” Mr. Sarkozy said, to remain relevant and competitive, but he was vague about the details of what needs to be done. “If Europe does not change quickly enough, global history will be written without Europe,” he said. “Europe needs more solidarity and that means more discipline.”
His televised speech came against a backdrop of deepening alarm about the contagious nature of the euro crisis, which threatens Italy and has begun to sap confidence in France and Germany, the strongest economies among the 17 European Union countries that use the single currency. The crisis has exposed the seeming inability of European leaders to resolve the onerous debt problems of its weaker members, calling into question the survival of the euro, once seen as a glue that would bind Europe together.
Chancellor Angela Merkel of Germany is scheduled to give a similar address to Germans on Friday, but it was clear that Paris and Berlin do not agree on all aspects of a proposal. Mr. Sarkozy said the two would meet on Monday in Paris, before a European Union summit meeting next Thursday and Friday.
Mr. Sarkozy expressed confidence that the European Central Bank, while independent, would act in the face of possible deflation, one of the looming consequences of the crisis. To promote faster change and more fiscal responsibility, France favored more majority voting within the euro zone instead of acting only by unanimity. But the euro must be saved, Mr. Sarkozy said. “The disappearance of the euro,” he said, would “make our debt unmanageable” and create “a loss of confidence that would lead to paralysis and the impoverishment of France.”
Speaking in Toulon, the port city where three years ago he gave a major address about how to counter the 2008 economic crisis, Mr. Sarkozy said that convergence between France and Germany was his goal, but that convergence did not mean any loss of identity. “There can’t be a single currency without economies heading toward more convergence,” he said.
Facing a tough re-election fight in five months, Mr. Sarkozy is presenting himself as a man of experience, capable of strong leadership in a crisis. He is beginning to improve in the opinion polls, though from historically low levels. But if the crisis worsens, of course, Mr. Sarkozy’s chances for a second term are likely to diminish rapidly.
He is said to be more willing to try for treaty amendments to be approved by all 27 European Union members, as Germany and Britain want, though he is reported to believe that a treaty or an intergovernmental agreement among only the members of the euro zone would be easier — and faster — to achieve.
France would prefer to involve the European Central Bank more explicitly as a lender of last resort, which Germany rejects. Mrs. Merkel also rejects the idea of changing the bank’s charter in any treaty changes.
But European officials believe that a significant move toward treaty changes to create more economic governance in the euro zone — with tighter, more enforceable limits on debt and centralized oversight of national budgets — will give the European Central Bank the political cover to act more aggressively to defend Italy and Spain and drive down currently unsustainable interest rates on their bonds.
Mikolaj Dowgielewicz, Poland’s Europe minister, said on Thursday that it was “too late for half measures.” Decisions at next week’s European Union summit meeting should provide “a signal that there is a willingness to have the E.C.B. do more,” possibly with the help of the International Monetary Fund, he said. He said he was not speaking for the rotating European Union presidency, currently held by Poland.
Mario Draghi, the new head of the European Central Bank, hinted at a readiness for more aggressive action. “What I believe our economic and monetary union needs is a new fiscal compact — a fundamental restatement of the fiscal rules together with the mutual fiscal commitments that euro area governments have made,” he told the European Parliament on Thursday. He said that a new compact was “definitely the most important element to start restoring credibility. Other elements might follow, but the sequencing matters.” But he also said that the bank’s purchases of sovereign bonds must be “temporary and limited.”
France remains reluctant to involve the European Commission, the permanent European Union bureaucracy, or the European Parliament, in any serious oversight role for national budgets. France wants to reserve that power to the European Council of nations, arguing that directly elected national parliaments must be consulted. France has historically been reluctant to cede too much sovereignty to Brussels, beginning with the rejection of a European army in 1954 and the referendum defeat of a draft European constitution.
How much sovereignty to cede is an important political issue for Mr. Sarkozy, who heads France’s Gaullist party. He is seeking a balance between French nationalism, especially when Marine Le Pen of the far-right National Front is calling for France to exit the euro, and support for European solidarity in a crisis, when the euro, and possibly the whole European project that anchors Germany, appear to be at risk.
With details of the changes still be to agreed upon between France and Germany, the president of the European Council, Herman Van Rompuy, has begun circulating ideas as the basis for the negotiation, a European official said on the condition of anonymity because of the delicacy of the issue. “No one is waiting for a Franco-German paper,” the official said.
Stephen Castle contributed reporting from Brussels.
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