Sarkozy, Merkel to meet as Europe seeks crisis exit.

Reuters - France's Nicolas Sarkozy will meet German Chancellor Angela Merkel in Berlin on January 9 for talks that are likely to centre on new rules to enforce budget discipline across the European Union.

The two leaders are anxious to flesh out a plan agreed at a December summit by all EU members except Britain for a new treaty to forge closer fiscal integration, as Europe battles to stem a sovereign debt crisis in the euro zone.

The French president's office announced the upcoming meeting but gave no further details.

Finance ministers from the EU's 27 members will meet on January 23 before their leaders hold a summit a week later. They will be under intense pressure to find a definitive solution to the crisis which threatens the very survival of the single currency, 10 years after it came into circulation.

Italy's Prime Minister Mario Monti, who is still battling to shore up confidence in the Italian economy, will also meet the French and German leaders this month as well as British Prime Minister David Cameron.

All European Union leaders except Cameron agreed at an emergency summit on December 9 to draft a new treaty that would implement tougher rules on budget discipline, including automatic sanctions for deficit offenders.

However a new treaty could take some time to finalize.

Adding to the pressure, credit rating agencies are scrutinizing countries in the 17-nation currency bloc for possible sovereign downgrades, which would immediately push up government borrowing costs and weigh on efforts to bring public finances under control.

Calls are mounting for the European Central Bank to take more definitive action to stem the crisis by stepping up its purchases of government debt, a move beyond the current limits of its mandate which France has strongly backed in the past but Germany has so far opposed.