The new head of the European Central Bank signaled on Thursday, December 3, it stood ready to act more aggressively to fight Europe's debt crisis if political leaders agree next week on much tighter budget controls in the 17-nation euro zone, Reuters reports.

In France, President Nicolas Sarkozy called for a new treaty incorporating tougher budget discipline, a European Monetary Fund to support countries in difficulty and decisions in the euro area taken by majority vote instead of unanimity.

Addressing supporters in the port city of Toulon, Sarkozy said he and German Chancellor Angela Merkel would meet next Monday to outline joint proposals to put to a December9 EU summit, seen as make-or-break for the 12-year-old single currency.

"Let us not hide it, Europe may be swept away by the crisis if it doesn't get a grip, if it doesn't change," Sarkozy said, warning that a collapse of the euro would make France's debt unmanageable and wipe out people's savings.

"We don't have the right to let such a disaster happen."

ECB President Mario Draghi painted a dark picture of the state of Europe's banking system, speaking a day after the world's major central banks took emergency joint action to provide cheaper dollar funding for starved European banks.

"Downside risks to the economic outlook have increased," he said, noting that the ECB's mandate was to maintain price stability "in both directions" - a rare indication that the bank is concerned about deflation risks as well as inflation.

Sarkozy voiced similar sentiments in words designed to reassure voters anxious about handing more power to Brussels. He called for an "intergovernmental" Europe and made no mention of the stronger role for the European Commission or the European Court of Justice sought by Berlin.

"Sovereignty can only be exercised with others. Europe doesn't mean less sovereignty but more sovereignty because it gives us a greater capacity to act," Sarkozy declared.