Germany, France plan quick new Stability Pact: report (Reuters)

BERLIN (Reuters) ? France and Germany are planning a quick new pact on budget discipline that might persuade the European Central Bank to ramp up its government bond purchases, Welt am Sonntag reported on Sunday.

Echoing a Reuters report on Friday from Brussels, the Sunday newspaper said the French and German leaders were prepared to back a deal with other euro countries that might induce the ECB to intervene more forcefully to calm the euro debt crisis.

The newspaper report quoted German government sources as saying that the crisis fighting plan could possibly be announced by German Chancellor Angela Merkel and French President Nicolas Sarkozy in the coming week.

In an advance release before publication, Welt am Sonntag said that because it would take too long to change existing European Union treaties, euro zone countries should just agree among themselves on a new Stability Pact to enforce budget discipline - possibly implemented at the start of 2012.

It could be similar to the Schengen Agreement which applies to EU countries that choose to take part and enables their citizens to enjoy uninhibited cross border travel. Among the countries in the Stability Pact, there would be a treaty spelling out strict deficit rules and control rights for national budgets.

The European Central Bank should also emerge more as a crisis fighter in the euro zone, Welt am Sonntag wrote, saying that while governments cannot tell the independent ECB what to do, the expectations are clear.

"Based upon these measures, there should be a majority within the ECB for a stronger intervention in capital markets," Welt am Sonntag said. It quotes a central banker as saying: "If the politicians can agree to a comprehensive step, the ECB will jump in and help."

The ECB, which cannot directly finance governments, has been buying Italian and Spanish bonds on the open market since August to try to keep down borrowing costs for the euro zone's third and fourth largest economies.

Yields on Italian and Spanish debt have nonetheless climbed in recent weeks, despite the ECB intervention and the appointment of a new technocrat government in Rome and the election of the conservative Popular Party in Madrid.

In Brussels on Friday, euro zone officials said a push by euro zone countries toward very close fiscal integration could give the ECB the necessary room for maneuver to scale up euro zone bond purchases and stabilize markets.

France's Journal du Dimanche newspaper said reforms to Europe's economic governance would be the focus of a speech which Sarkozy will deliver in the Mediterranean port of Toulon on Thursday.

"The European Commission could take on supra-national powers," said one French presidency source, according to the newspaper, saying that Brussels would supervise the decisions of countries at risk of default, provided they request this.

"National parliaments will retain the initiative over the (policy) efforts to be made," one French negotiator told the paper.

The European Commission, the EU executive arm, put forward proposals on Wednesday to grant it intrusive powers of approval of euro zone budgets before they are submitted to national parliaments, which, if approved, would effectively mean ceding some national sovereignty over budgets.

Berlin, meanwhile, is pushing to change the European Union treaty so that a country could be sued for breach of EU budget rules in the European Court of Justice.

Le Figaro said there was resistance within Sarkozy's government to allowing France's budgets to be submitted for scrutiny by an "intergovernmental conference" in Brussels, but the president would seek to rally support for this.

A closer fiscal union could eventually pave the way for joint debt issuance for the euro zone, where countries would be liable for each others' debts.

Germany strongly opposes the joint issuance idea fearing spendthrift countries would piggyback on its low borrowing costs - meaning no gain for the virtuous and no pain for the sinners.

(Additional reporting by Jan Strupczewski in Brussels and Daniel Flynn in Paris; writing by Erik Kirschbaum; editing by Elizabeth Piper/Ruth Pitchford)

Source: http://us.rd.yahoo.com/dailynews/rss/eurobiz/*http%3A//news.yahoo.com/s/nm/20111127/bs_nm/us_eurozone_integration_ecb

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Gingrich wins NH backing as Romney plugs along (AP)

WASHINGTON ? Republican presidential hopeful Newt Gingrich landed the endorsement of New Hampshire's largest newspaper on Sunday while rival Mitt Romney earned a dismissive wave, potentially resetting the race in the state with the first-in-the-nation primary.

For Gingrich, the former House speaker, the backing builds on his recent rise in the polls and quick work to build a campaign after a disastrous start in the summer. Romney, the former Massachusetts governor who has a vacation home in the state and has been called a "nearly native son of New Hampshire," absorbed the blow heading into the Jan. 10 vote that's vital to his campaign strategy.

"We don't back candidates based on popularity polls or big-shot backers. We look for conservatives of courage and conviction who are independent-minded, grounded in their core beliefs about this nation and its people, and best equipped for the job," The New Hampshire Union Leader said in its front-page editorial, which was as much a promotion of Gingrich as a discreet rebuke of Romney.

The Union Leader's editorial telegraphed conservatives' concerns about Romney's shifts on crucial issues of abortion and gay rights were unlikely to fade. Those worries have led Romney to keep Iowa's Jan. 3 caucuses ? where conservatives hold great sway ? at arm's length.

At the same time, the endorsement boosts Gingrich's conservative credentials. He spent the week defending his immigration policies against accusations that they are a form of amnesty. On Monday, Gingrich takes a campaign swing through South Carolina, the South's first primary state.

Romney, taking a few days' break for the Thanksgiving holiday, has kept focused on a long-term strategy that doesn't lurch from one development to another. Last week, he picked up the backing of Sen. John Thune, a South Dakota conservative, to add to his impressive roster of supporters.

The Union Leader's rejection of Romney wasn't surprising despite his efforts to woo state leaders. The newspaper rejected Romney four years ago in favor of Arizona Sen. John McCain, using front-page columns and editorials to promote McCain and criticize Romney.

"It helped McCain a lot because it buttressed the time he spent there. McCain camped out in New Hampshire and was able to make good with The Union Leader," said Craig Stevens, a spokesman for Romney's 2008 bid who is not working for a presidential candidate this time.

"Now, the speaker has to spend the time there, too," Stevens said.

Since his first run, Romney courted publisher Joseph W. McQuaid. Earlier this year Romney and his wife, Ann, had dinner with the McQuaids at the Bedford Village Inn near Manchester, hoping to reset the relationship. It didn't prove enough.

Romney's advisers were quick to point out that Gingrich went into October with more than $1 million in campaign debt. Romney, meanwhile, was sitting on a pile of cash and only last week began running television ads ? a luxury Gingrich can't yet afford.

The duo's rivals, meanwhile, tried to gain traction.

Herman Cain on Sunday criticized any immigration proposal that included residency or citizenship but struggled to explain how he would deal with the millions of people estimated to be currently living illegally in the United States.

Cain, who had enjoyed a polling surge, has seen his luster fade as his seemed to have trouble articulating the nuances of his policy positions. For instance, he was unable to explain the difference between "targeted identification," which he says would determine common characteristics of people who want to harm the United States, and racial profiling.

At the same time, Cain acknowledged that accusations that he sexually harassed several women during his days running the National Restaurant Association in the 1990s have pulled him from among the front-runners. He has flatly denied the allegations repeatedly.

While Romney enjoys solid support in national polls, many Republicans have shifted from candidate to candidate in search of an alternative. That led to the rise ? and fall ? of potential challengers such as Cain, Rep. Michele Bachmann of Minnesota and Texas Gov. Rick Perry.

Romney enjoys solid leads in New Hampshire polls, too. A poll released last week showed him with 42 percent support among likely Republican primary voters in the state. Gingrich followed with 15 percent in the WMUR-University of New Hampshire Granite State poll.

Rep. Ron Paul of Texas posted 12 percent support and former Utah Gov. Jon Huntsman found 8 percent support in that survey.

Those numbers could shift based on the backing of The Union Leader, a newspaper that proudly works to influence elections, from school boards to the White House, in the politically savvy state.

"With Newt, the endorsement alone won't get him closer to Romney. But if The Union Leader kicks the you-know-what out of Romney, that could help Gingrich," said Mike Dennehy, a Republican consultant and former McCain aide who is neutral in the presidential contest.

Huntsman, President Barack Obama's former ambassador to China, said the endorsement points to how competitive the New Hampshire contest is.

"A month ago for Newt Gingrich to have been in the running to capture The Union Leader endorsement would have been unthinkable," Huntsman said in an interview Sunday during a break in campaigning.

The endorsement, signed by McQuaid, suggested that New Hampshire's only statewide newspaper was ready to assert itself again as a player in the GOP primary ? even if the newspaper has reservations.

"We don't have to agree with them on every issue," McQuaid wrote. "We would rather back someone with whom we may sometimes disagree than one who tells us what he thinks we want to hear."

With six weeks until the primary, The Union Leader's move could again shuffle the race, further boosting Gingrich and driving a steady stream of criticism against his rivals. In recent weeks, Gingrich has seen a surge in some polls as Republicans focus more closely on deciding which candidate they consider best positioned to take on Obama.

He has also started to put together a campaign organization in New Hampshire. He brought on respected tea party leader Andrew Hemingway and his team has been contacting almost 1,000 voters each day. Gingrich hasn't begun television advertising and has refused to go negative on his opponents.

The newspaper has a decidedly mixed record of picking candidates. It backed Steve Forbes in 2000 and Pat Buchanan's 1992 and 1996 bids. Neither candidate won the Republican nomination.

Gingrich, who left the House in 1999 after disastrous midterm elections for the GOP, has faced skepticism about his personal life. He is married to his third wife and acknowledged infidelity during his first two marriages.

Even so, voters are giving Gingrich a look ? and the timing appears to be ideal for him.

"Romney is a very play-it-safe candidate. He doesn't want to offend everybody or anybody," said Drew Cline, the op-ed editor of The Union Leader. "He wants to be liked. He wants to try to reach out and be very safe, reach out to everybody, bring everybody on board."

That isn't the brand of candidate The Union Leader was looking to back, he said.

___

Cain and Cline spoke on CNN's "State of the Union." Huntsman appeared on "Fox News Sunday."

Source: http://us.rd.yahoo.com/dailynews/rss/gop/*http%3A//news.yahoo.com/s/ap/20111127/ap_on_el_pr/us_campaign2012

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