Angela Merkel, German chancellor, and Nicolas Sarkozy, president of France, have written to the head of the European Commission calling for tougher controls on financial speculation.

The two page letter to José Manuel Barroso, EC president, urged the Commission to bring forward to July proposals for tougher rules for speculating in financial markets. The proposals were originally expected to be introduced in October.

Merkel and Sarkozy said it was “indispensable” to improve transparency in short positions in equities and debt, especially sovereign debt.

The Commission is due to publish a consultation paper in the next few days on regulating short selling.

The two leaders “sought proposals” from Barroso on banning naked short sales of certain stocks and bonds and on naked credit default swaps on sovereign bonds.

A month ago Merkel unilaterally banned short selling of several instruments, including naked sovereign CDS and 10 German stocks.

The letter said the Commission should have proposals ready before a meeting of European finance ministers in mid-July.

Sian Williams swilliams@fow.com +44 207 779 8370