MercoPress. South Atlantic News Agency

Sarkozy prepares the stage for next week’s announcement of a new EU treaty

The French invited PM Cameron for lunch in Paris but talked of Fraco-German primacy

Prime Minister David Cameron held emergency talks with French President Nicolas Sarkozy on Friday, as France and Germany tried to drum up support for a new EU treaty to enforce budget discipline.

Cameron joined Sarkozy for a working lunch at the Elysee Palace for around an hour before heading back to London. Afterwards he appeared resigned to the idea that EU treaties would have to change.

“If there is treaty change, then I will make sure that we further protect and enhance Britain's interests,” he said.

Britain is not part of the 17-nation bloc that uses the single currency but is concerned that a Euro zone implosion would damage its own economy, and fears being sidelined by reinforced Franco-German ties at the heart of the union.

Sarkozy is to meet Chancellor Angela Merkel on Monday and the two are to jointly propose a new EU treaty, which the German leader said would create a “fiscal union with strict rules, at least for the eurozone”.

While France and Germany see closer European oversight of national budgets as the key to calming the storm on the bond markets, Cameron is under pressure from his Conservative supporters at home to win back powers from Brussels.

“We'll see what happens next Friday, but I'm absolutely convinced the bottom line for me is always what is in the best interests of the UK and how I can promote and defend that,” he said, referring to an EU summit next week.

Cameron and Sarkozy worked well together during NATO's military mission in Libya, but have reportedly clashed in bitter terms over European issues, as Britain seeks to protect its huge financial sector from EU regulation.

In a landmark speech Thursday, Sarkozy made no reference to Britain but instead talked up the primacy of the Franco-German relationship and the Euro.

“Europe will have to make crucial choices in the weeks to come,” he told thousands of hand-picked supporters in Toulon, adding: “Europe is not a choice, it is a necessity, but it needs to be rethought, re-founded.

”We must confront with total solidarity those who doubt the stability of the Euro and speculate on its break-up,“ he declared.

”France is fighting with Germany for a new treaty. More discipline, more solidarity, more responsibility... true economic government“ he said, urging members to adopt a ”Golden Rule“ obliging them to balance their budgets.

Cameron is under pressure from the powerful anti-EU wing of his Conservative Party to repatriate more powers from Brussels, but he has argued that the Euro zone is Britain's biggest trading partner and needs help.

”We want to help resolve the crisis in the Euro zone,“ he said. ”What that is about is convincing the markets that the institutions of the Euro will defend and promote that currency with everything they've got.”