Eurozone Four Leaders Agree Economic Growth Package

Leaders of the eurozone's four biggest nations have agreed in principle to measures to boost growth equal to 1% of the currency area's economic output.

"We want there to be a significant European growth package," said Italian PM Mario Monti as he outlined the 130bn-euros (£104bn; $163bn) package.

He spoke alongside Spanish PM Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande.

The four met in Rome ahead of an EU summit on the euro crisis next week.

The leaders sought to agree proposals on closer integration - including a banking union and a financial transactions tax - to be put forward at the broader EU summit.

'Here to stay'

Mr Monti had warned his EU peers that failure to agree on joint action would encourage market attacks on their economies.

He had predicted "progressively greater speculative attacks" without unified action from all the eurozone members.

Speaking after the talks, Mr Monti asserted in English that "the euro is here to stay, and we all mean it".

"We expect the conclusions of the EU summit will be more solid and credible compared with previous summits as far as growth is concerned," he predicted.

French President Francois Hollande, who made agreement of a European growth pact the central plank of his election platform last month, said the package would be "indispensable".

He said the four eurozone leaders had, he said, "made the prospect for growth much more concrete", asking whether anyone would have imagined a few weeks ago that the idea of growth would be on the agenda of the EU summit.

The French president said the four had also agreed to push for a pan-European tax on financial transactions - also known as a Tobin tax - another of the French President's election pledges.

However, the idea is opposed by the UK government, who says it would hurt the City of London unless the tax were also implemented in other non-European international financial centres.

Spanish banks

German Chancellor Angela Merkel told reporters that growth and solid finances were two sides of the same coin and she stressed the importance of greater political integration.

Friday's talks had been expected to involve a formal Spanish request for eurozone financial assistance.

However, no mention of a request was made in the press conference following the talks.

Spain is expected to ask for up to 100bn euros to save its distressed banks.

The Spanish, Italian and French leaders have advocated a banking union for the eurozone, likely to entail much stronger central regulation and supervision of European banks, as well as the creation of a common Europe-wide deposit guarantee scheme.

Spanish and Greek banks have experienced significant withdrawals of deposits in recent months, on fears that they may be insolvent, or that their home nations may exit the euro.

All the banks in eurozone peripheral economies, including Italy, have found it very hard to borrow from other banks and money managers since last autumn, forcing the European Central Bank to provide them with an unprecedented trillion euros of three-year emergency loans over the New Year.

'Ever more integration'

In comments published earlier in European newspapers, Mr Monti said that, without a credible plan, "the frustration of the public towards Europe would grow".

He said market attacks would target those who had failed to respect EU guidelines and would include "harassment of the weaker countries".

He spoke of the need for "ever more integration" for European economies to emerge in "good shape" from the debt crisis.

His comments echoed those of the head of the International Monetary Fund, Christine Lagarde, who said on Thursday that eurozone countries were undergoing "acute stress" and must tie their economies together much more closely if they wanted to tackle the crisis.

"The IMF believes that a determined and forceful move towards a complete European monetary union should be reaffirmed in order to restore faith in the system. Because as we see it at the moment, the viability of the European monetary system is questioned," Ms Lagarde said.

She also recommended that the eurozone help troubled banks directly and relax some austerity conditions for countries in trouble - ideas that have been resisted by Germany.

When asked what Germany would think of her proposals, Ms Lagarde replied: "We hope wisdom will prevail".