* Private investors must be part of future bailouts
* Further steps towards integration necessary
By Daniel Flynn
PARIS, Nov 2 (Reuters) - Europe's future depends on the success of the euro, and tougher political measures are needed to guarantee the stability of the single currency, German Finance Minister Wolfgang Schaeuble said on Tuesday.
In a speech delivered at the Sorbonne University in Paris, Schaeuble defended Franco-German efforts to draw up tougher sanctions against countries who fail to uphold the budgetary rules designed to underpin the euro.
Urged by Berlin and Paris, European Union leaders last week agreed to make limited changes to the bloc's treaty and tighten budgetary rules, but Schaeuble reiterated the German position that the planned measures did not go far enough.
"If we want a lasting, strong euro then we must be ready to take further steps towards integration in the euro zone. If we don't rescue the euro in the crisis, we will lose Europe and the European idea," Schaeuble said in the text of a speech.
The minister added that all 16 members of the euro area needed to get their budget deficits back below three percent of gross domestic product "as quickly as possible".
EU leaders have set about trying to draft a permanent mechanism for the bloc to replace a 440 billion euro ($610 billion) safety net for indebted euro zone countries due to expire in mid-2013.
For this to work, it would have to be possible to impose political and financial sanctions including the suspension of voting rights, Schaeuble said. Other EU member states have rejected the idea of allowing voting rights to be frozen.
"A key element of the mechanism must be the inclusion of the private sector," he said, noting that public bailouts had so far protected private investors from the risk of defaults.
"I'd like to remind those who still have a problem with this kind of mechanism that the currency union was never intended as a model for allowing financial speculators to get rich.
"And it's not a system to redistribute (wealth) from so called rich countries to poorer ones in the framework of a transfer union either," Schaeuble added.
Last week's agreement among EU leaders in Brussels followed an earlier deal between Paris and Berlin which some smaller states saw as a stitch-up by the EU's biggest member states.
The Franco-German partnership was crucial for the future of the union, the 68-year-old minister said.
"Only when Germany and France act together and apply the rules we impose on ourselves in an exemplary fashion will we ultimately manage to convince all member states of embarking on a collective road towards a future Europe," he said.
Schaeuble, one of the architects of German reunification, also dismissed the suggestion that Germany had agreed to give up the mark for the euro to get the backing of other nations for the postwar division of the country to end in 1990.
"Economic and monetary union was never a quid pro quo for German reunification. It was and is a conscious, logical step towards deeper European integration, which is in the interests of all the member states concerned," he said.
(Writing by Dave Graham; Editing by Ruth Pitchford)