Talks in Brussels finally produced a deal on a tighter fiscal union (and rules) for eurozone members - just not the one the markets were hoping for. Having failed to secure agreement among all 27 leaders to change the European Union treaty the leaders have instead drawn up a new "intergovernmental treaty". The failure to secure the backing of the UK and others, only increases uncertainty. Without agreement among all 27 countries, it remains unclear how the new fiscal rules will be enforced. The European Commission cannot legally have a formal role in any agreement outside the EU treaties. "We would have preferred a reform of the treaties among 27. That wasn't possible given the position of our British friends. And so it will be through an intergovernmental treaty of 17, but open to others," said French president Nicolas Sarkozy this morning. Having got a few hours sleep the European leaders reconvene later today to sign an accession treaty today to bring Croatia into the EU. Following that ceremony the new "17+ eurogroup" are expected to meet. Will EU officials attend the meeting? 
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Friday, December 9, 2011
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Talks in Brussels finally produced a deal on a tighter fiscal union (and rules) for eurozone members - just not the one the markets were hoping for. Having failed to secure agreement among all 27 leaders to change the European Union treaty the leaders have instead drawn up a new "intergovernmental treaty". The failure to secure the backing of the UK and others, only increases uncertainty. Without agreement among all 27 countries, it remains unclear how the new fiscal rules will be enforced. The European Commission cannot legally have a formal role in any agreement outside the EU treaties. "We would have preferred a reform of the treaties among 27. That wasn't possible given the position of our British friends. And so it will be through an intergovernmental treaty of 17, but open to others," said French president Nicolas Sarkozy this morning. Having got a few hours sleep the European leaders reconvene later today to sign an accession treaty today to bring Croatia into the EU. Following that ceremony the new "17+ eurogroup" are expected to meet. Will EU officials attend the meeting? 
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European Union leaders failed to get all of the bloc's 27 members to back a change in the EU treaty to tighten their fiscal coordination as a decisive summit in Brussels ended its first day in the early hours Friday.
The leaders, who are still deeply divided over key elements of their crisis strategy, decided they would move to form a pact among at least 23 of the members to tighten rules on national fiscal policy.
But details of the proposed treaty remained to be settled. The U.K. stood aside—after Prime Minister David Cameron failed with what officials said was a "shopping list of demands" designed among other things to protect national supervision of its banks—while Hungary, Sweden and the Czech Republic reserved their positions.
"We will achieve the new fiscal union. We will have a euro currency within a stable union," German Chancellor Angela Merkel said at the end of the meeting. "We will have stronger budget deficit regulations for euro-zone members."
Following European-wide "stress tests", Germany's banks were found to need more than double the amount of capital anticipated, with the focus immediately turning on Commerzbank, in which the German state already owns a 25% stake, and amid speculation the government may need to step in with a fresh capital injection.
Any further signs of weakness among the major banks will increase fears that Europe is in the grip of a fresh credit crunch — where banks refuse to lend to each other and to businesses.
When the initial results of stress tests intended to protect banks against the eurozone crisis were announced in October the European Banking Authority announced that €106bn (£90bn) of extra capital would be needed to shore up banks against the eurozone crisis and restore confidence in the battered sector. But that shortfall was revised up to €115bn and the gap for Germany's banks raised to €13.1bn from €5.2bn. Commerzbank alone needs €5.3bn of the total for Germany, up from €3bn, Deutsche Bank needs €3.2bn, while the amounts needed by Spanish banks remain unchanged at €26.2bn – with Santander needing to find €15bn of the total. Commerzbank is confident it can find the extra capital by its own means.
Since the initial results of the stress tests in October, banks have been shrinking balance sheets and selling off assets to bolster their capital, and the EBA made it clear on Thursday that it is concerned that banks do not exacerbate the downturn by restricting credit to businesses and individuals as they repair capital cushions.
Draghi said tensions in financial markets presented the greatest risk to Europe's economy: "Intensified financial tensions are continuing to dampen the economic outlook," he warned, as the ECB slashed its eurozone growth forecast for 2012. It is now expecting something between a 0.4% contraction and 1% growth. Even so, Draghi admitted that the ECB's governing council was not unanimous in deciding to administer a second interest rate cut in two months, to 1%, despite having raised rates only in July on concerns about inflation.
A draft version of a statement by leaders circulating last night in Brussels said that the ESM would be launched in July, and that countries will need to limit their structural deficit to 0.5pc of their gross domestic product . It added that euro members are prepared to lend 150bn euros to strengthen the International Monetary Fund and would like to see other IMF countries contribute the same amount.
As talks continued early into this morning, Germany remained opposed to both giving the ESM a banking licence - a move that would allow it to access funds from the European Central Bank – and to the issue of joint Eurobonds.
Mr Cameron has demanded that two legal "protocols" to protect City and to preserve EU single market are inserted in any new EU treaty.
The draft British text does not create any new opt-outs but seeks to protect Britain's financial sector from a tide of EU legislation.
Jean-Claude Juncker, head of the Eurogroup bloc of finance ministers of eurozone states, said he would “not accept” summit diversions about what “the UK will not do what all the others have to do”.
However, Mrs Merkel and Mr Sarkozy have urged agreement from the 17 eurozone nations. Mr Sarkozy said: “If we do not reach a deal, there will be no second chance.”
Your point is well taken but they disagree on separate points. Ireland, as the second biggest debtor of the Eurozone (and probably biggest per population) is objecting to their low corproate tax being aligned with the rest of the Eurozone. Self-interest.
Finland and the NL are objecting to small countries being steamrollered by the big, something the Brits do not really mind and have used in the past to great effect for their own benefit starting with Thatcher and Mitterand.
The problem of balancing the needs of the small and large occupied the lions share of the USA 1787 constitutional convention. It created the Congress of the Senate (2 per state) and House (proportional) and the President. The EU has a long way to go.
Perhaps
the UK Parliament should block the Lisbon Amendment anyway – after
all we don't want an Oligarchical superstate on our doorstep and the
people's of Europe would thank us if they wake up soon enough to
realise the ESM is not a beneficial helping hand but a mailed fist to
beat them down.
can only hope that your Government holds firm, we need all the help we can get to stop this monstrosity that is being birthed by France and Germany. Recommended by 8 people
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Wolf_from_the_Fog
Today 03:52 AM
That's exactly what I'm afraid of. Finnish gov has been famous of giving-up when the heat starts. Fortunate for us, the very recent trend is "enough is enough". To illustrate the way typical Finn thinks, a joke for you all:
Japanese, German and Finnish top officials encountered an elephant. Japanese started to think: "How many meals I can get out of that elephant?". German official's thoughts were: "How much strength it has got to work for me?" Finally, Finnish one started to ponder: "What does that elephant think of me?"
Experts warned that France and Germany’s plans were inadequate, anyway.
Raoul Ruparel of think tank Open Europe said: “Rather than focusing their energies on the key issue at hand – avoiding immediate crisis – France and Germany have tried to secure another couple of changes which they are keen on, namely the harmonisation of corporate tax bases and the use of majority voting for ESM decisions. Unfortunately, this looks to have backfired by stoking the anger of Ireland and Finland… [creating] another obstacle to forming a lasting agreement.”
Imagine trawling the lunatic asylums of europe, and and gathering together the most deluded, incompetent imates, perticularly the ones hav failed spectacularly in anything they have attempted to do, and that failure caused by their sheer mental instability, and psychoses, led them to the alysum in first place, where they spend their days ranting and screaming at the other inmates,
just imagine you collected dozens of these lunatics and then put them in charge of, not a whelk stall, not a committeee to decide what the menu for lunch is, but a whole effin continent.
That is precisely what we have here.
Not a single one of these half witted deranged and dangerous lunatice should ever be let out again.
Absolutely nothing, not one word, not one single screech, yelp, howl or banal utterance coming from these clowns bears any relation to the events in the real world.
They are so disconnected from reality, its a joke, its turned into what is becoming the longest ever running but now a tedious comdy show, for the world to get a daily dose of this inept farce.
Its time to bring it to an end,
And whats required to do that is to kill off the leading actors from the asylums, not one ny one but preferably with a big bazooka, something that can make them put all their imaginary tools back in their imaginary boxes, then sedate the effin lot of them and put them all back into their padded cells
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