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EU Summit: Counting Up Money

  • December 16th, 2010
  • Posted by EUEditor

eu-money-ec.jpgEuropean heads of government are meeting this Thursday and Friday in Brussels (16-17.12.10) with money on their minds – a permanent funding arrangement to help member countries with sovereign debt.

The summit will be deciding on recommendations from the EU Foreign Ministers, that their binding treaties be amended to provide for a Stabilisation Mechanism.

It would take over from the temporary fund of  €750-million (A$1.008-billion; xe.com, 15.12.10), set up in May after Greece and Ireland ran into difficulties servicing national debt.

Greece had already received assistance; the Irish government, pressed to meet rates being demanded by lenders, obtained access to the fund this month, to get interest rates it could afford.

A major player is the chief creditor nation, Germany, and today (15.12.10), the Chancellor, Angela Merkel, laid out her position for the summit, speaking in the Bundestag.

She said the fund plan needed to go ahead, packaged with closer political ties generally among the 27 member countries of the European Union.

“No one in Europe will be left alone, no one in Europe will be abandoned,” she said.

“Europe succeeds when it acts together and, I would add, Europe succeeds only when it acts together.”

That did not mean the fund itself should be expanded, and the Chancellor opposed a proposal for the issue of a common European bond.

The joint European bond issues, promoted by the Luxembourg government and others, would be designed to spread the risk of obtaining and letting out credit.

It would also be expected to work to the disadvantage of larger countries in a better financial condition, specifically Germany, through causing them to pay more for money, overall.

Chancellor Merkel said that the management of the pressure on Greece and Ireland, and later Portugal and Spain, had shown that the Euro currency itself had been defended and had shown itself crisis proof.

Tbarroso-strasbourg-19-june-074.jpgThe President of the executive body, the European Commission, Jose Manuel Barroso, was speaking at the same time (15.12.10), on the same lines, at the European Parliament in Strasbourg.

He said the proposed treaty changes would put the Stabilisatiion Mechanism fully into law — “legally waterproof”.

It would assist with the difficult task of fortifying the EU and promoting the “European idea”.

“A strong and stable Euro area in an ever closer European Union”, he said.

See also, EUAustralia Online, “Economy: Edgy times in EU”, 6.12.10.

Reference

EC, Brussels, “José Manuel Durão Barroso President of the European Commission The European Council: sending a signal of unity, solidarity and support for the European project European Parliament debate on upcoming European Council Strasbourg, 15 December 2010”, Strasbourg, 15.12.10, SPEECH/10/753.

Dave Graham and Brian Rohan,  Reuters, London, “Update1-Merkel says EU leaders to adopt rescue shield plan”, 15.12.10. http://www.reuters.com/article/idUSLDE6BE0ZB20101215, (15.12.10).

Matt Zuvela (AFP, AP), Chuck Penfold, “German chancellor stands her ground on euro crisis ahead of EU summit”, Deutsche Welle, Bonn, 15.12.10. http://www.dw-world.de/dw/article/0,,6337545,00.html, (15.12.10).

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