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

Sweden may be at war "in a few years" - top brass in leaked document
2016-02-13 5:24
In a few years Sweden may be engaged in a war with a “qualified opponent” after two centuries of peace, a senior Swedish commander has told soldiers in an internal brochure. The alarming message was reportedly sent by Major General Anders Brännström, the Army chief, in a brochure distributed among the participants of a major annual event that is to open ...
Danish imam urges govt to accept child marriages among refugees
2016-02-13 4:57
A high-profile imam has urged the Danish government to accept child brides, as the practice is part of the culture of many refugees arriving in the country. It follows an announcement by Denmark that such couples will be separated under Danish law. Imam Oussama El-Saadi, of the Aarhus mosque in Denmark, said that child brides should be looked at from a ...
White Parents in Virginia Shutdown White Guilt Video!
2016-02-13 4:56
You see folks? This is what happens when you stop blaming the Joo, and you get the fuck off your favorite bitch corner and start taking action! This is what happens when parents start parenting again! What? You’re gonna brainwash our kids with your filth and lies? We don’t think so. How would you like an empty school with no ...
Hungarian Top Economist: Civil War is Coming to Europe
2016-02-13 2:36
Zsolt Bayer, Hungarian journalist, publicist, and co-founder of Hungary's currently ruling political party, and Dr. László Bogár, former politician and leading economist, discuss the Cologne sexual assualts committed by migrants on New Year's Eve, 2016. This short part of the 60-minute long television program that aired on Echo TV on January 8, 2016, is of a rant by Mr. Bogár warning ...
British scientists granted permission to genetically modify human embryos
2016-02-12 23:48
The Francis Crick institute will genetically edit the leftover embryos from from IVF clinics British scientists have been granted permission to genetically modify human embryos by the fertility regulator. The scientists want to deactivate genes in leftover embryos from IVF clinics to see if it hinders development. It will only be the second time in the world that such a procedure has ...
More News »