Eurozone leaders hail leap towards economic union
The attempt to bail-out Greece and other struggling eurozone countries raised the prospect of a two-speed European Union with far closer ties between countries using the euro compared with those, such as Britain, that remained outside.
European leaders thrashed out an agreement to save the stricken euro last night, with a major step towards a full economic union in which taxpayers in rich nations would cover the spending of poorer ones.
Nicolas Sarkozy, the French president, said the deal had pulled the eurozone back from the brink of disaster and laid foundations for the creation of an EU “economic government”.
He hailed it as “a historic moment” that would provide “bold and ambitious” plans for the creation of an embryonic EU treasury in the form of a European Monetary Fund.
Our ambition is to seize the Greek crisis to make a quantum leap in eurozone government,” he said.
“The very words were once taboo. We will give a clearer vision of the way we see the eurozone evolving. We have done something historic.
It looks like the EU may emerge as strong as ever - certainly in terms of more and more centralized power - not surprising for a prophecy watcher.
The Greek bail-out: what does it mean and why is it happening?
The agreement points to what many suspect — that the ultimate solution to draw a line under the crisis may have to come in the form of ever greater economic financial integration across the euro nations, with stronger members supporting the weaker.
Euro leaders agree second Greece bailout and overhaul of rescue fund
Following weeks of political and market turbulence, eurozone leaders on Thursday undertook radical steps to safeguard the single currency agreeing the beginnings of a European Monetary Fund and a fresh bailout for Greece.
"For the first time, the politics and the markets are coming together," said European Commission president Jose Manuel Barroso, with markets having to date doubted the fundamental commitment of leaders to saving the eurozone.
EU council president Herman Van Rompuy said the deal proved "we will not waver in defence of our common currency
"We have agreed to create the beginnings of a European Monetary Fund," said French president Nicolas Sarkozy.
Merkel, who forced Paris to back down on a proposed bank levy in return for giving new powers to the rescue fund, said the move was "historic".
"What we are doing now is an example for deeper integration - handing over and transferring more competences to EU institutions. This is a historic day."
EU leaders look to expanded bailout
The most striking departure outlined on Thursday at the eurozone's "moment of truth" summit in Brussels was a raft of measures that, if agreed and implemented, would turn the single currency's bailout fund into a baby EMF, replicating the kind of remit across the eurozone that the IMF operates globally.
Politically, it is a big move, inconceivable only weeks ago, indicating how the swirling crisis has concentrated minds.
They are supposed to save Greece and ringfence the euro. They also mark an incremental step towards eurozone government and fiscal union
These are interesting developments. It is almost becoming a "government within a government" with the eurozone nations now having their own financial agreements.
How this will impact the greater EU is anyone's guess, but for now, the EU has locked down their centralized power and kept the Euro alive.
We have also learned from this crisis that the EU will go to almost any lengths to keep this union together.
Very interesting indeed.