EU leaders discussing 'limited' changes to treaty

 

UK Prime Minister David Cameron and President of the European Parliament Jerzey Buzek arrive in Brussels to discuss the eurozone's debt crisis

Europe's leaders have agreed to change the EU treaty if necessary to help resolve the eurozone's debt crisis and stop the region sinking into recession.

EU president Herman Van Rompuy said after a day of emergency talks in Brussels that members would "explore the possibility of limited change".

UK Prime Minister David Cameron said he had sought assurances to protect Britain's interest if there is change.

Another meeting of all the EU countries will be held on Wednesday.

On Sunday morning the leaders of all the European Union's 27 members held talks about the Greek debt crisis, recapitalising banks, and bolstering the bailout fund.

This was followed in the afternoon by a separate meeting of the 17 nations that use the euro.

Speaking after the meeting, Mr Van Rompuy said that altering the treaty was under discussion. Although no proposed details were given, any change is likely to involve closer fiscal and economic cooperation.

"The aim is deepening our economic convergence and strengthening economic discipline," Mr Van Rompuy said.

He said the words 'limited change' meant "not a general overhaul of the institutional architecture. We also said that we would need the agreement of all the 27 (member states) before we can decide on a treaty change.

Start Quote

The more closely integrated the eurozone becomes, the greater the British fear will be that decisions will be taken that impacts on their major concerns such as preserving and expanding the single market”

End Quote

"The most important thing is not to change the treaty, the most important thing is to strengthen economic convergence," he said.

'Safeguard'

Mr Cameron said that he had secured safeguards to ensure that Britain's national interest within the EU was protected as the eurozone nations moved towards greater fiscal and economic integration.

He told a news conference: "This must not be at the expense of Britain's national interest. I have secured a commitment today that we must safeguard the interests of countries that want to stay outside the euro, particularly with respect to the integrity of the single market for all 27 countries of the EU."

The Prime Minister said the EU needed to build on the progress of the work done on Saturday on recapitalising the banks.

"More progress is needed," he said. "I think we are beginning to see the elements of a strong package coming together."

Mr Cameron has cancelled visits to Japan and New Zealand this week in order to attend Wednesday's summit of EU members.

Initially only the 17 countries that use the euro were to meet on Wednesday.

Speaking alongside German Chancellor Angela Merkel at a joint press conference on Sunday afternoon, French President Nicolas Sarkozy said "a quite broad agreement is taking shape on the reinforcement" of the EFSF bailout fund.

Mrs Merkel said a French idea for the fund to acquire a banking licence was dead, leaving a mix of plans to use the EFSF to offer insurance to eurozone bond holders, and moves to create a 'fund within the fund' that would be topped up by some of the main emerging nations.

Start Quote

If you don't want to be scared, turn away now - Italy needs to borrow €250bn next year just to refinance its existing debts”

End Quote

There are also discussions with banks for them to accept a 50% write-off on Greek debt, in exchange for a new bailout by the EU and the International Monetary Fund.

All of the initial proposals reached over the weekend of talks need to be ratified by the 27 member at the full summit on Wednesday.

'Decisive and effective'

Before the start of Sunday's meetings, Greek Prime Minister George Papandreou urged Europe to "act decisively and effectively" to contain the troubles.

"It's been proven now that the crisis is not a Greek crisis," he told reporters. "The crisis is a European crisis. So now is the time that we as Europeans need to act decisively and effectively."

Shortly before the summit began, Italy's Prime Minister Silvio Berlusconi held private talks with EU President Herman Van Rompuy, Mrs Merkel, and French President Nicolas Sarkozy.

There is concern that budget cuts passed by the Italian parliament do not go far enough.

On Saturday eurozone finance ministers struck a provisional deal that will see banks raise more than 100bn euros (£87bn) in new capital to shield them against possible losses to indebted countries.

It is conditional on a wider accord, including a write-down of Greek debt.

BBC business editor Robert Peston said the 100bn euros agreed in the deal will be provided to banks by commercial investors, national governments and the EU's bailout fund.

Speaking after the 10-hour meeting on Saturday, Mr Osborne said: "Britain will keep up pressure in the next few days to a comprehensive package to resolve the European crisis and to make sure that we get jobs and growth."

Debt-laden Greece has been bailed out - twice - along with the Irish Republic and Portugal.

The eurozone is working on a third package for Greece, as well as a solution that could help the much bigger economies of Spain and Italy, which are faltering.

 

More on This Story

Global Economy

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    -1

    Comment number 242.

    I've always suspected this campaign of 'Bring back our British Laws' had a devious side Now we have it from the mouth of the Government itself. William Hague's just made it crystal clear that European laws on social and employment issues are what his party puts at the top of their list for 'repatriation'. These are laws which PROTECT British working people. Leopards don't change their spots.

  • rate this
    +1

    Comment number 241.

    The fact is that after all the talking its only the Germans who have to pay so other countries need to remember their manners ,and yes you're right the second world war us just coming to an end with a comprehensive german victory

  • rate this
    +1

    Comment number 240.

    If Sarkozy & the other EU 'Leaders' had listened to their own people AND non-EU Leaders in the past - it would not be in the awful condition it now finds itself.

    The sheer arrogance & 'closed-mind' atitude of the EU has been notable for it's incompetence and Sarkozy's 'selective' thinking confirms this.

    The EU itself badly needs to face 'cuts' - in the way it is destroying Democracy!

  • rate this
    0

    Comment number 239.

    If Sarkozy sick of criticism, perhaps he should avoid dishing it out to Merkel behind her back when she gets a second helping of cheese, insulting the leader of the eurozone country with the deepest pockets is hardly conducive to resolving a debt crisis.

  • rate this
    0

    Comment number 238.

    EU= Conspiracy, no theory!

    Germany did not lose the second world war, they just took 72 years to win it!

 

Comments 5 of 242

 

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.