EU members will decide on a permanent mechanism to resolve euro zone debt crises and possible changes to the EU treaty in December. Reuters reported this after their summit draft conclusions showed on Friday.
Leaders of the 27 states asked EU Council Chairman Herman van Rompuy to mull on the treaty changes needed. They noted that they should be limited and stressed that the existing rule that EU countries cannot assume the debt of another member of the bloc must stay.
“The European Council will revert to this matter at its December meeting with a view to taking the final decision both on the outline of a crisis mechanism and on a limited treaty amendment so that any change can be ratified at the latest by mid-2013,” said the draft conclusions, obtained by Reuters.
German Chancellor Angela Merkel won European Union backing for a rewrite of EU treaties to create a permanent debt-crisis mechanism by 2013; to prevent a repeat of the Greece-led shock that jolted the euro.
As the biggest contributor to 860 billion euros ($1.2 trillion) in loans and pledges to stem this year’s debt crisis, Germany wants to spare voters the costs of any future operations to rescue financially distressed states.
“We won’t allow only the taxpayers to bear all the costs of a future crisis,” Merkel told a press conference in Brussels today after a summit of EU leaders. There is: “a justified desire to see that it’s not just taxpayers who are on the hook, but also private investors.”
While the EU said debt restructuring wasn’t discussed, concern that Germany will dictate the final shape of the 16- nation euro region’s crisis mechanism accelerated declines in bonds in deficit-strapped Greece, Ireland and Portugal.
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