French President Nicolas Sarkozy and German Chancellor Angela Merkel proposed Wednesday that the payment of European Union structural funds be suspended to eurozone members that don't rein in their deficits, according to dpa. In a letter to European Council President Herman Van Rompuy outlining their proposals for greater economic integration in the 17-country eurozone, Merkel and Sarkozy said they hoped to see "payments from the EU structural and cohesion funds suspended to countries in the eurozone that do not conform to the recommendations of the procedure on excessive deficits." The letter was published a day after a summit in Paris, in which the leaders of Europe's two biggest economies came up with several proposals aimed at curbing the debt crisis that has already submerged three eurozone members and threatens several others. At a press conference following the summit they detailed three main proposals: setting up an "economic government" for the eurozone, with a fixed president and regular leaders' meetings; getting all eurozone members to adopt laws requiring them to present balanced budgets by mid-2012, and the introduction of taxes on financial transactions. They did not say at the time that countries should forfeit their structural funds if they failed to act to get their deficits in line with a eurozone limit of 3 per cent. The EU's structural and cohesion funds aim to reduce regional disparities between members of the 27-nation EU. Most of the money goes to poorer EU members. The amount set aside for the 2007-2013 period was 347 billion euros (499 billion dollars). In their letter to Van Rompuy, the two leaders confirmed that they would like the Belgian to become the first president of the eurozone, with a 2.5-year mandate. They also said they'd like to see eurozone members with excessive deficits explain how "they will take into account the impact of aging populations on the sustainability of long-term debt."
