Eurozone crisis: New EU treaty ’may not be needed’
2011-12-07 0:00

From: bbc.co.uk

Success boys. More control achieved!

Tougher rules to tackle the eurozone debt crisis can be achieved without changing EU treaties, European Council President Herman Van Rompuy says.

In a leaked report for a crucial EU summit beginning on Thursday, he offers a fast-track "fiscal compact" that does not need lengthy ratification by parliaments or national referendums.

Germany and France are pushing for a new EU treaty by March, saying stricter rules should be enshrined there.

The US has backed their plans.

But Treasury Secretary Timothy Geithner said the US Federal Reserve had no plans to give money to the International Monetary Fund to boost the eurozone's bailout fund.

Mr Geithner, who is meeting all major eurozone leaders during his three-day visit of Europe, stressed that more action was needed to boost economic growth in Europe, alongside the longer-term reforms. He meets President Nicolas Sarkozy in Paris on Wednesday.

Five crucial days for the euro

  • Monday: Nicolas Sarkozy and Angela Merkel propose tighter eurozone controls


  • Italian PM Mario Monti seeks parliamentary approval for his austerity package


  • Tuesday: US Treasury Secretary Timothy Geithner arrives in Germany before travelling to France and Italy for talks with euro leaders


  • Wednesday: The talking continues as many EU leaders gather in Marseille for a European People's Party congress


  • Thursday: ECB's monthly policy meeting could produce new measures


  • Thursday and Friday: Crucial EU summit in Brussels to consider Sarkozy-Merkel plan


’Negative implications’

Mr Van Rompuy will be chairing the two-day summit, and all the signs are that it could be a bruising affair, the BBC's European affairs correspondent Chris Morris reports.

In the interim report, details of which have been obtained by the media, Mr Van Rompuy proposes a plan aimed at agreeing a "new fiscal compact" without holding a referendum or ratification by the parliaments of each eurozone country.

The draft says that tougher fiscal reforms can be adopted simply by amending a protocol - a procedure that needs national consensus but does not require substantial changes to the EU treaties.

This, Mr Van Rompuy argues, would speed up the implementation of reforms and remove any potential political complications.

The interim report contains the following key provisions:

  • Each eurozone member's budget deficit should be below 3% of GDP and national debt under 60%


  • A "golden rule" should be enshrined into national legislation to guarantee a balanced budget in the medium-term


  • The eurozone bailout fund to be given a banking licence to borrow directly from the European Central Bank


  • The European Commission to have the power to impose austerity measures automatically on countries which require bailouts


However, Mr Van Rompuy acknowledges that more far-reaching reforms would eventually require a change in EU treaties.

Some of the report's proposals tally with the Franco-German plan how to tackle the crisis, but some do not.

Paris and Berlin appear to be pushing through more radical measures, our correspondent says, and if all 27 EU members cannot agree, then they are prepared to work towards a new treaty involving the eurozone bloc and any other country that wants to join.

Such a move could leave Britain - a non-eurozone EU member - feeling more isolated, he says.

UK Prime Minister David Cameron has said he will not sign a new treaty without safeguards for to protect financial interests of the City of London and Britain's role in the European single market.

But such is the depth of the crisis surrounding the eurozone that the main focus is not on the EU solidarity but on restoring market confidence in whatever way proves possible, our correspondent says.

Earlier this week, Standard & Poor's put all eurozone nations on credit watch "with negative implications".

The ratings agency said the decision was prompted "by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole".



Related Articles


Latest News from our Front Page

Fanning the Flames of Another Black Church Arson Hoax
2015-07-02 0:57
America is still reeling from the horrific Charleston, S.C., massacre at Emanuel African Methodist Episcopal Church that claimed the lives of nine innocent people. The last thing the community and our country need are hysterical journalists compounding the pain with inflammatory reporting on an unsubstantiated “epidemic” of black church arsons. On Monday, a Baltimore Sun lead editorial decried “a series of mysterious ...
Cold War Redux: Do you want to fight in World War Three?
2015-07-02 0:04
The rhetoric coming of Washington is pushing us dangerously close to a world changing scenario. In the following episode of CrossTalk, Peter Lavelle discusses the way Russia and Putin are being framed by Western governments and mainstream media with guests including Chris Hedges. The dangers of ignoring historical context when reporting ‘news’ is examined, along with the pure ‘imperial hubris’ of ...
Survey Says: 35 Percent of Americans Would Expatriate
2015-07-02 0:14
 As the Fourth of July weekend looms and Americans prep their grills and ready their fireworks, some citizens are packing their bags. A recent online poll of more than 2,000 adults by TransferWise, a peer-to-peer money transfer service based in the United Kingdom, revealed that 35 percent of American-born residents and emigrants would considering leaving the United States to live in ...
Greek crisis deepens as loan repayment deadline passes
2015-07-01 23:19
Greece's midnight deadline passed Tuesday for repaying $1.8 billion to the International Monetary Fund and other international creditors, deepening a financial crisis that threatens the Mediterranean nation's membership in the European Union. Despite an eleventh-hour effort by Greek lawmakers Tuesday to secure a new two-year debt deal before the deadline, European finance ministers reviewing Greece's proposal concluded their conference call without ...
Black Suspect Arrested After Racist Message Discovered Outside Predominately Black Church
2015-07-01 22:46
A Colorado Springs man was arrested after police believe he left racist messages outside a church. Vincent Broughton, 44, who is black, is facing charges for committed a bias-motivated crime and disorderly conduct. The signs were posted outside the New Covenant church that is predominately attended by African Americans. One sign references the KKK. Another reads, “Black men beware, you are the ...
More News »