MercoPress. South Atlantic News Agency

S&P downgrade warning, “the best news” to find an EU solution, says Schaeuble

The truth is markets don’t trust the Euro, said Germany’s Finance minister

German Finance Minister Wolfgang Schaeuble said Standard & Poor’s downgrade warning for 15 Euro- area governments will spur European leaders to double efforts to resolve the debt crisis at the Dec. 8-9 summit.

A day after German Chancellor Angela Merkel and French President Nicolas Sarkozy strengthened their joint push for new rules to tighten euro-area economic cooperation Schaeuble said that S&P warning -- issued hours after Merkel and Sarkozy met in Paris -- was the “best encouragement” to drive toward a solution at the European Union summit in Brussels.

“The truth is that markets in the whole world right now don’t trust the Euro area at all,” Schaeuble said on Tuesday today in Vienna. S&P statement will prompt European leaders “to do what we’ve promised, namely to take the necessary decisions step-by-step and to win back the confidence of global investors.”

Merkel and Sarkozy are leading the charge toward the latest crisis fix after agreeing a joint position on automatic penalties for deficit violators and anchoring debt limits into euro states’ constitutions. Investors are looking for such an agreement on closer fiscal cooperation in the Euro area to trigger intensified action from the European Central Bank.

Among the summit measures announced by Merkel and Sarkozy were plans to fast-track the Euro permanent rescue fund to 2012, one year earlier than envisaged. Germany and France will also seek to ensure that decisions by the fund, the European Stability Mechanism, can be made by a “qualified majority” rather than a unanimous vote by the participating governments. Sarkozy said they aimed to reach consensus on treaty change with other euro leaders by March.

S&P said that ratings could be cut by one level for Austria, Belgium, Finland, Germany, Netherlands and Luxembourg, and by up to two notches for the other governments. The other countries warned are Estonia, France, Ireland, Italy, Malta, Portugal, Slovakia, Slovenia and Spain.