German Chancellor Angela Merkel gained some respite from domestic pressure to take a tougher line in the euro zone crisis when Eurosceptics hostile to more bailouts lost a referendum in her junior coalition partner, the Free Democrats, aimed at blocking a permanent rescue fund.
Meanwhile, a first draft of a planned fiscal union treaty among euro zone countries and aspiring members, published on Friday, showed that countries could be taken to the European Court of Justice if they fail to meet agreed budget targets.
Merkel - under pressure from the revered Bundesbank to force debt-saddled euro zone countries to reform and save their way out of crisis with austerity measures - has led a push for automatic sanctions for deficit "sinners" in the bloc.
For more: Italy PM warns policymakers against dividing Europe | Reuters
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