UPDATE 1-EU countries to cut budgets or face sanctions -summit

* France, Germany propose tougher budget sanctions

* Countries failing to reduce budget in 6 mths to be hit

* Sanctions should be “more automatic”

(Combines stories, adds details)

DEAUVILLE, France, Oct 18 (BestGrowthStock) – The European Union
should impose sanctions on member states that fail to take
measures to reduce their budget deficits within six months,
France and Germany said in a joint declaration on Monday.

Speaking after talks in the northern French city of
Deauville, leaders of both countries also said that sanctions
should be “more automatic” for EU members that fail to bring
their deficits under control.

“A country with excessive deficits that does not take
the necessary correction measures within six months will be
sanctioned,” French President Nicolas Sarkozy said after a
meeting with German Chancellor Angela Merkel.

The leaders also said they would examine the possibility of
confiscating EU voting rights from countries that failed to
bring their deficits under control, as well as preemptive
sanctions for delinquent nations.

Planned changes to the EU’s 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,
and were the subject of EU finance minister talks in Luxembourg
on Monday. [ID:nLDE69H1VZ]

The Franco-German propositions would 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, Merkel
said.
(Reporting by John Irish; Writing by Nick Vinocur; Editing by
Ron Askew)

UPDATE 1-EU countries to cut budgets or face sanctions -summit