Sarkozy eyes two-speed future for Europe

French President Nicolas Sarkozy laid out a vision of Europe on Tuesday in which euro zone countries accelerate and deepen their integration while a wider and expanding group outside the currency bloc stays more loosely connected.
Speaking to French students in Strasbourg, home of the European parliament, Sarkozy said the "two-speed" model for Europe was the only way forward given the prospect of more countries joining the European Union.
"There are 27 of us. Clearly, down the line we will have to include the Balkans. There will be 32, 33, 34 of us. No-one thinks that federalism, total integration, will be possible with 33, 34, or 35 states," he said.
At the forefront of Europe's efforts to stem its debt crisis, Sarkozy advocates integration in public but in practice has favoured a distinctly inter-governmental approach — consulting first with his German counterpart Angela Merkel before bringing in EU decision-makers.
He is not known to have used the term "federalism" previously to describe Europe's future.
"Clearly, there will be a two-speed Europe: one speed that moves toward more integration in the euro zone and one speed for a confederation in the European Union," he added.
Answering questions from the crowd, Sarkozy repeated that allowing Greece to join the euro had been a mistake and said that Italy — now in markets' firing line over its debt levels — would not be able to escape tough austerity.