Sarkozy and Merkel call for euro zone competition pact (VIDEO)

France and Germany have called for an extraordinary summit of European heads of state on economic competitiveness as the euro zone seeks to move past a debt crisis.

French President Nicolas Sarkozy and German Chancellor Angela Merkel announced a joint push for a “pact for competitiveness” in unison with more immediate steps — still the subject of dispute — to shore up Greece and Ireland and prevent fiscal woes from swamping Portugal and Spain.

Attending an EU summit in Brussels, the two didn’t say whether Germany and France had resolved disagreements over the expanded use of the $600 billion rescue fund for debt-strapped countries.

"We have to increase our collective competitiveness," Merkel told reporters during a brief appearance alongside Sarkozy during a meeting of EU leaders. "We want a pact for competitiveness that step by step, we are growing closer together."

Sarkozy said that the pact would be ready for euro zone leaders to sign at a meeting next month, and that EU countries that didn't belong to the currency bloc would be invited to pledge to make the same reforms.

Reuters carried translated comments by each leader:

Nicolas Sarkozy

"We are working hand in glove, France and Germany, with a clear, total determination to support the euro, to defend the euro.

"We want to strengthen the competitiveness of Europe and its economy.

"We want to ensure the convergence of different European economies and we have further strengthened our discussions on this matter in the past few weeks. We therefore agree on a structural plan that is designed to respond to the challenges that Europe faces.

"This response means more integration of our economic policies, with the aim of strengthening the competitiveness of our economies."

Angela Merkel

"Germany and France will make it very obvious that we intend to defend the euro as a currency — that is only what is to be expected — but we also want to defend it as a political project.

"What we want is to ensure is to safeguard prosperity and wealth for the people in our countries. But we must increase our competitiveness, and the yardstick or benchmark should be the member state that shows the best practices.

"That means we want to commit ourselves to a pact for competitiveness."

"What we want to establish is a pact for competitiveness and in so doing we want to make it very clear that we intend to grow together more closely at a political level, which is not to say that there should not be a competition for the best solution among the member states.

"Our deadline would be to aim for the March European Council meeting to take the definitive proposals, which is to say that before that council meeting we would have to agree amongst the euro area members and the Euro group members on the details of that pact.

"Before the end of the year we will be able to in very concrete terms furnish proof that we are serious about such a pact.

"We want to send out a clear message, that as the European Union, we intend to grow together. What we want to establish is a pact for competitiveness. Before the end of the year, we will show proof that we are serious about the pact."