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EU leaders promise further steps to quell crisis

Dec 14 2012, 12:37 IST
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European leaders agreed to press on with further steps to shore up their finances and sustain momentum in tackling the debt crisis.  (Reuters) European leaders agreed to press on with further steps to shore up their finances and sustain momentum in tackling the debt crisis. (Reuters)
SummaryThey also launched tentative discussions on how to make countries stick to economic targets.

European leaders agreed to press on with further steps to shore up their finances and sustain momentum in tackling the debt crisis on Friday, a day after clinching a deal on banking supervision and approving long-delayed aid to Greece.

After more than eight hours of late-night talks at a summit in Brussels, leaders promised to push ahead with setting up a

mechanism to wind d own problem banks, although it was unclear when the facility would be completed.

They also launched tentative discussions on how to make countries stick to economic targets and on creating a "solidarity fund" to help member states suffering one-off economic shocks, but did not delve deeply into either issue, pushing the debate out to the middle of next year. With officials concerned about complacency creeping into decision-making now that financial markets have calmed and the crisis seems less acute, leaders appeared intent on showing that they are not relaxing.

That said, no concrete decisions were taken at the summit. Instead, it was more about verbal commitments to push ahead. "This evening we decided to put in place a single resolution mechanism," Herman Van Rompuy, the president of the European Council and chairman of the summit, told a news conference.

The European Commission will present a proposal on the mechanism, which would wind-up troubled banks by keeping the good parts alive while the unhealthy operations are shut down, during 2013, Commission President Jose Manuel Barroso said.

French President Francois Hollande told reporters the mechanism would "see the light of day" during the year, but it was not clear whether he expected it to be functioning by then or merely be in the early stages of construction. "We agreed a roadmap for the future development of the currency union," said German Chancellor Angela Merkel, without going into detail about the discussions.

The two-day summit, the sixth and last of 2012, had only ever been intended to be a detailed discussion on how best to overhaul economic and monetary union and correct the problems that have fuelled three years of debt crisis.

The meeting was held just hours after EU finance ministers achieved a significant breakthrough in negotiations over a 'banking union' by agreeing that the European Central Bank would be made the chief supervisor of euro zone banks. That decision, and another by euro zone ministers to release up to 50 billion euros in new aid to Greece,

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