German Chancellor Angela Merkel and French President Nicolas Sarkozy highlighted international financial reforms and narrowed their difference on Monday, Xinhua reported.
Berlin and Paris will send a joint letter to the G20 leaders to urge for more international financial regulations, including a tax on international financial transactions, said Merkel in a joint news conference with Sarkozy after their talking.
"We're not yet satisfied with what's been achieved since the first G-20 and we think that we have to forge ahead on regulation," Merkel said.
"It must work out," when she talked about the transaction tax, as "it is a precondition to ensure to protect tax payers from having to bail out banks again."
Merkel and Sarkozy further emphasized their positions on reforming EU to promote stability and narrowed their differences on the issue of establishing a European "economic government".
Before the EU summit on Thursday, the two leaders will make a series of joint proposals aiming at "bringing about changes to the culture of stability," Merkel said.
She said both she and Sarkozy agreed that measures of sanction should be added into the current EU treaties to make sure member states live up to their financial commitments.
"An example can be removing the voting rights from those states who seriously eat their words, because EU need treaties with teeth to maintain stability and growth,"Merkel said.
Sarkozy also said he agreed on the necessity "to strengthen the economic regulations in Europe," will submit joint proposals with Merkel.
Media used to doubt large differences may exist between Merkel and Sarkozy on establishing a separate institution to govern European economy as they postponed their planned talks at the last minute last week.
France wanted to form a dedicated secretariat to harmonize economic, social and tax policies and rebalance the European economy between surplus and deficit countries, while Germany still insisted that key decisions should be made by all 27 EU leaders, such as the European Council.
Sarkozy said he had a "frank and boisterous"talk with Merkel as they both do not avoid problems and wanted to discuss all policy options. "It's about disburdening the European system by not multiplying new institutions," he said.
"We need no new institutions, but in case of necessity, you have to be flexible," Merkel said.