PRESS ASSOCIATION -- The leaders of France and Germany are pushing all 17 nations that use the euro to enshrine balanced budgets in their constitutions and want greater collective governance of the eurozone.
French President Nicolas Sarkozy said he and German Chancellor Angela Merkel want a "true European economic government" that would consist of the heads of state and government of all eurozone nations.
The new body would meet twice a year and be led by EU president Herman Van Rompuy.
Mr Sarkozy and Mrs Merkel presented their proposals after meeting in Paris amid signs of economic slowdown and after an exceptionally turbulent week on financial markets prompted by concern about Europe's financial health.
Mr Sarkozy and Mrs Merkel also pledged to harmonise their countries' corporate taxes in a move aimed at showing the eurozone's largest members are "marching in lockstep" to protect the euro. Both leaders stressed their commitment to defending the common currency, a cornerstone of integration on the continent.
The pair suggested the new body would meet twice a year and more in times of crisis, with Mr Rompuy leading it for a two-year term. After that, Mr Sarkozy suggested, it could be opened up to other heads of states and government.
The move appeared to be a step towards the closer long-term economic integration that many analysts have said is inevitable to make the euro experiment survive, though it was unclear how much effect it would have in the short term.
"There has to be a stronger co-ordination of financial and economic policy" to protect the euro, Mrs Merkel said. She stressed that the crisis built up over several years by the actions of several member states, and there is no solution to tackle the crisis within days.
"We will regain the lost confidence," she said. "That is why we go into a phase with a new quality of co-operation within the eurozone."
But the two leaders ruled out issuing common government debt in the form of eurobonds, at least for now, despite demand by many investors for such a bold but politically difficult move.