Nicolas Sarkozy and German Chancellor Angela Merkel whisper to each other in Paris

German Chancellor Angela Merkel and French President Nicolas Sarkozy demanded closer integration - including total central control of countries' national budgets - be permanently enshrined in law in a brand new EU treaty. After meeting in Paris, they announced that an unprecedented bilateral agreement between the two countries will be sent to the President of the European Council, Herman Van Rompuy, on Wednesday. Nicolas Sarkozy and Angela Merkel speaking on further integration in Europe

The future of Europe must be convergence and co-operation. We will not pay for others' debts without controlling them.

It will then be discussed at an EU-wide summit on Friday, with a view to officials drafting the new treaty and putting it to all the nations of Europe. But although both Mrs Merkel and Mr Sarkozy said they wanted all 27 European Union countries - including Britain - to sign up, they made clear the 17 eurozone members would simply go ahead on their own anyway. Mrs Merkel said: "It's a historic choice.

"We both believe that the most important thing is friendship between France and Germany. "We had decades of terrible war and 70 years of peace - we need to understand each other and accept our differences. "This is proof of our absolute determination that the stability of the euro is preserved. "We have come to a close agreement, there is close cooperation between France and Germany.

French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris "The objective is not that either country does better than the other but that the euro emerges stronger and that there is less unemployment. "The future must be of convergence and co-operation. We need to be a solid union that will have its place in the world in the future." Mr Sarkozy added: "We want to make sure that the imbalances which led to the situation in the euro zone today cannot happen again. Sarkozy has accepted Angela Merkel's strategy for saving Europe

"Therefore we want a new treaty, to make clear to the peoples of Europe, members of Europe and members of the eurozone, that things cannot continue as they are. "We want to have a better alignment with Europe so that all the budgets of the 17 eurozone countries will contain a constitutional idea - the national budget should be aligned towards the eurozone. "France and Germany stand shoulder to shoulder. We are in total agreement that eurobonds are no solution to the crisis. We will not pay for others debts without controlling them." The two leaders have felt the heat from other heads of state to solve the crisis.

Merkel added: "We don't have time. We are conscious of the gravity of the situation and of the responsibility that rests on our shoulders." In Britain, David Cameron has come under pressure to call a referendum on the EU if the 27 member states were to have a treaty. Iain Duncan Smith said yesterday that the British people should be given a say on Europe if any major change in EU rules were to take place. But the Prime Minister stood firm, making clear that a new treaty to sort out the eurozone crisis would not necessarily trigger a referendum.