Sarkozy says French Pension Reform will Go Through

An unpopular reform of the French pension system will go through, French President Nicolas Sarkozy said on Monday.  It’s despite months of protests and a refinery strike that has been causing fuel shortages.

Sarkozy speaks to journalists during a summit in the northern French city of Deauville.

[Nicolas Sarkozy, French President]: 

"The reform is essential and France is committed to it and will go ahead with it just as our German partners did."

After speaking with German Chancellor Angela Merkel, Sarkozy says the European Union should impose automatic sanctions on member states that fail to reduce their budget deficits.

[Nicolas Sarkozy, French President]: 

"A country with excessive deficits that does not take the necessary correction measures within six months will be sanctioned.”

The leaders will also be examining the possibility of confiscating EU voting rights from countries that fail to bring their deficits under control, as well as pre-emptive sanctions for delinquent nations.  

Planned changes to the EU budget rules, outlined in the Stability and Growth Pact, will be the biggest overhaul of the fiscal rules underpinning the euro since its creation in 1999.

Changes to the budget rule were also the subject of EU finance minister talks in Luxembourg on Monday.

[Angela Merkel, German Chancellor]: 

"It is important that we find such a mechanism so that all behave more responsibly, this is exactly the lesson we have to draw out of this crisis." 

The Franco-German propositions will be advanced as part of a reform of the stability pact which should be ready for an EU summit in March 2011 and decided and ratified by 2013, according to Merkel.