EU agrees to work closely
By Gabriele Steinhauser |
December 18, 2010, Saturday
|
Print Edition
Print Edition
LED by Germany and France, European Union leaders agreed yesterday to work for closer economic cooperation amid market turmoil over towering debts in countries across the continent.
The leaders made progress at a summit in Brussels on a new rescue system for future debt crises but decided not to beef up their existing bailout fund - further worrying ratings agencies and other market players who say the EU needs to do more right now to keep the euro intact.
The EU is wrapping up a punishing year that has rocked the world's confidence in its ambitious experiment to share a currency.
French President Nicolas Sarkozy said he and German Chancellor Angela Merkel will present new proposals in the first weeks of 2011 to reduce differences among the economies that use the euro.
"We have to tackle the competitiveness gaps within the 16 eurozone nations," he said.
Merkel said they have no firm ideas yet, but may look at stable budgets or compare social security systems across the region.
Differences among states from powerhouse Germany to debt-saddled Greece came to the fore this year, as the EU had to bail out two members and held countless meetings to stabilize the euro.
"Monetary union requires an economic union, nobody can avoid this destiny," said Belgian Prime Minister Yves Leterme, whose country holds the EU's rotating presidency.
Merkel said Europe "grows ever closer together, sometimes at different speeds."
The one firm financial decision the EU leaders have made at this summit was to change the treaty that underpins their bloc to allow for a permanent rescue plan for countries that get buried in debt beyond 2013. That's when the current 750-billion-euro (US$992.85 billion) bailout fund expires.
EU governments had decided to set up the long-term European Stability Mechanism at their previous summit in October and finance ministers outlined its broad features at the end of November. This week's decision gives it the legal basis.
Finance ministers of the 16 states that use the euro will now begin working out details of the new mechanism, including how much money eurozone nations are willing to chip in.
The leaders made progress at a summit in Brussels on a new rescue system for future debt crises but decided not to beef up their existing bailout fund - further worrying ratings agencies and other market players who say the EU needs to do more right now to keep the euro intact.
The EU is wrapping up a punishing year that has rocked the world's confidence in its ambitious experiment to share a currency.
French President Nicolas Sarkozy said he and German Chancellor Angela Merkel will present new proposals in the first weeks of 2011 to reduce differences among the economies that use the euro.
"We have to tackle the competitiveness gaps within the 16 eurozone nations," he said.
Merkel said they have no firm ideas yet, but may look at stable budgets or compare social security systems across the region.
Differences among states from powerhouse Germany to debt-saddled Greece came to the fore this year, as the EU had to bail out two members and held countless meetings to stabilize the euro.
"Monetary union requires an economic union, nobody can avoid this destiny," said Belgian Prime Minister Yves Leterme, whose country holds the EU's rotating presidency.
Merkel said Europe "grows ever closer together, sometimes at different speeds."
The one firm financial decision the EU leaders have made at this summit was to change the treaty that underpins their bloc to allow for a permanent rescue plan for countries that get buried in debt beyond 2013. That's when the current 750-billion-euro (US$992.85 billion) bailout fund expires.
EU governments had decided to set up the long-term European Stability Mechanism at their previous summit in October and finance ministers outlined its broad features at the end of November. This week's decision gives it the legal basis.
Finance ministers of the 16 states that use the euro will now begin working out details of the new mechanism, including how much money eurozone nations are willing to chip in.
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