Quick Wrap-up of EU Summit
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Here are some highlights of the deals, and unbroken deadlocks, after the first day of the EU summit in Brussels: The 20th round of emergency crisis talks led by eurozone finance ministers and regulators.
After 13 hours of talks, EU leaders yesterday agreed to step up their rescue plans, promising more help for weaker euro economies such as Spain and Italy while expediting the financial integration of the euro bloc.
Here are some highlights of the deals, and unbroken deadlocks, after the first day of the EU summit in Brussels: The 20th round of emergency crisis talks led by eurozone finance ministers and regulators.
After 13 hours of talks, EU leaders yesterday agreed to step up their rescue plans, promising more help for weaker euro economies such as Spain and Italy while expediting the financial integration of the euro bloc.
The session which ran late into the night saw leaders of the 17-nation currency bloc agree that eurozone rescue funds could be used for sovereign debt purchases without forcing countries to adopt extra austerity measures.
In addition, they agreed that the permanent bailout fund, the European Stability Mechanism, would be able to recapitalise banks directly without adding to a country’s budget deficits.
According to European Council President Herman Van Rompuy, this would break the “vicious circle between banks and sovereigns.”
At the same time, European leaders agreed to a 120 billion euros “growth pact” which would be used to stimulate growth and create jobs. This includes increasing the lending capacity of the European Investment Bank, the EU’s long-term lending arm, by 10 billion euros to 60 billion euros.
The pact will also see the pilot launch of EU project bonds worth 4.5 billion euros for infrastructure improvements, focusing on energy, transport and broadband.
Spain and Italy had initially refused to sign off on the deal unless they received emergency help on their borrowing costs, which threatened to force the third and fourth largest eurozone economies out of capital markets.
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Italian Prime Minister said that the discussions had been “hard and full of moments of tension” but hailed the breakthroughs as a “very important deal for the future of the EU and the eurozone.”
Monti also could not resist reminding German Chancellor Angela Merkel of Italy’s corresponding victory on the football pitch, as Italy defeated Germany in the Euro2012 semi-finals yesterday.
“It is a double satisfaction for Italy,” he said.
European leaders have yet to debate the possibility of joint debt issuance as well as discuss the specific steps towards creating a blueprint for fiscal stability and economic integration.
Before the summit, leaked documents revealed that European Council president Jose Manuel Barroso, European Comission Mario Draghi, head of European Central Bank Jean-Claude Juncker as well as Rompuy were considering a plan that would give a central financial authority the power to rewrite eurozone budgets.
Day two of the Summit resumes today in Brussels.
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