Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Business World News New treaty to save euro splits European Union

By Ahtasham Ul Haq Subscribe to RSS | December 10th 2011 | Views:

Business World News New treaty to save euro splits European Union:

Date December 09 , 2011

Leaders of 23 European countries desperate to save the shared currency agreed on a new treaty.

Leaders of 23 European countries desperate to save the continent s shared currency agreed in all-night talks Friday to surrender some sovereignty in a new treaty but failed to get all 27 European Union members to join in.

The split between those in the new treaty and those outside rattles the foundations of a union created to foster peace and prosperity across a bloodied Europe after World War II. The EU has struggled to unite to stem a 2-year-old spiral of debt that started in Greece, has plunged the eurozone into crisis, and now threatens to send the global economy back into recession.

Even after Friday s long-awaited deal, watched by governments and markets worldwide, the European leaders have huge hurdles still ahead. They are meeting again later Friday to work out what exactly their new treaty will contain and how violators of its strict budget rules will be policed. They want it written by March.

Asian stocks deal tumbled Friday as investors grew increasingly pessimistic that European leaders would conclude this week s crucial summit without finding a solution radical enough to fix the debt crisis.

Britain, which doesn t use the euro, led the push against a treaty tying all 27 EU countries to tighter fiscal union, arguing that it would threaten sovereignty and London s esteemed financial services industry. Germany and France, the eurozone s biggest economies, had pushed for a 27-nation accord.

French President Nicolas Sarkozy laid the blame at the feet of British Prime Minister David Cameron.

"David Cameron made a proposal that seemed to us unacceptable, a protocol to the treaty that would have exonerated the United Kingdom from a great number of financial service regulations," Sarkozy said shortly before dawn, after what he called a "difficult" dinner meeting had dragged through the night.

"We couldn t accept this. We consider to the contrary that part of the troubles of the world come from the lack of regulation of financial services," Sarkozy said. "If you want an opt-out clause to not be in the euro and ask to participate in all decisions of the euro ... and even criticize it, this is not possible."

Cameron defended his stance.

"What was on offer is not in Britain s interest so I didn t agree to it," he told reporters in Brussels.

"We re not in the euro and I m glad we re not in the euro," he said. "We re never going to join the euro and we re never going to give up this kind of sovereignty that these countries are having to give up." The French president said work was proceeding on an "intergovernmental accord" among the 17 countries that use the euro plus as many as six others, not counting Britain, Hungary, and so-far undecided Czech Republic and Sweden.

Swedish Prime Minister Fredrik Reinfeldt signaled after the meeting it was unlikely his country would join the accord.

"It would be very odd signing up to a treaty pointing out as if we were a eurozone country," he told The Associated Press. "And that was never the aim."

The governments signing onto the new treaty will have to agree to allow unprecedented intervention in national budgets by EU-wide bodies.

According to a statement issued after the meeting broke up, governments participating in the agreement will need to have balanced budgets which is counted as a structural deficit no greater than 0.5 percent of gross domestic product

and will have to amend their constitutions to include such a requirement.

The treaty will include an unspecified "automatic correction mechanism" for countries that break the rules, the statement said.

In addition, countries that run deficits larger than 3 percent will face sanctions. To prevent such deficits, countries will have to submit their national budgets to the European Commission, which will have the authority to request that they be revised. Countries will also have to report in advance how much they plan to borrow.

But Cameron threatened to complicate the new 23-member treaty. "The institutions of the European Union belong to the European Union, belong to the 27" member states, he said. The new treaty would rely on the European Commission and the European Court of Justice to enforce its rules.

Despite the challenges ahead, European Central Bank chief Mario Draghi said it was a good result for the eurozone, and German Chancellor Angela Merkel praised it. "I have always said the 17 states of the eurogroup have to regain credibility," she said. "And I believe with today s decisions this can and will be achieved."

The summit meeting in Brussels was viewed as a critical step in the effort to save the euro. The currency is losing the trust of the international financial markets, who fear that some debt-laden euro countries may ultimately be unable to pay their debts.

That doubt means that the governments of countries viewed as in a precarious state must pay higher interest to borrow the money they need to carry on and that, in turn, makes their budget deficits even worse and can be unsustainable in the long run.

EU officials believe that one way of regaining market trust is to beef up the financial governance overseeing the eurozone countries and their budgets. Any intergovernmental treaty will be an effort to ensure that national budgets are brought into balance and large debts are not run up again.

And the officials believe another way to regain the trust of investors is to have enough money on hand to guarantee that eurozone countries won t default on their debts.

Toward that end, Herman Van Rompuy, president of the European Council, said the eurozone, together with some other EU countries, would provide up to €200 billion ($268 billion) in extra resources to the International Monetary Fund, to be used to help countries in dire straits. Non-euro countries Sweden and Denmark already said they would contribute some extra money.

Sarkozy also said the EU s two bailout funds, meant to rescue countries having trouble refinancing their debts the European Stability Mechanism, or ESM, and the European Financial Stability Facility, or EFSF would be managed by the European Central Bank, though the details still need to be worked out.

The failure to get agreement among all 27 EU members came despite a marathon negotiating session. The 27 EU presidents and prime ministers began their talks at 7:30 Thursday evening and continued past 4:30 a.m.

Ahtasham Ul Haq - About Author:
More Information visit the site:

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:

Related Business Articles Subscribe to RSS

Acupuncture marketing is important in todays world
Published by Ashish Pandey on April 13th 2012 | Business
Acupuncture marketing and having a nice acupuncture website goes hand in hand. You should have a nic...
The progress online today news has made
Published by Nidhigupta on June 14th 2012 | Business
News is something that reaches out to each and everyone in the whole world. It is a very popular and...
Competitive world needs global news
Published by Nidhigupta on May 26th 2012 | Business
Awareness about what is happening in our country or the world can be done only through various types...
The upsetting breaking news for India
Published by Nidhigupta on July 23rd 2012 | Business
In this competitive world, it has become compulsory to keep ourselves updated with all the current e...
Contributing to an environmentally friendly world with CNG Systems
Published by 1300golimo on December 4th 2011 | Business
CNG is a substitute for fossil fuels such as gasoline and diesel that is quickly growing in populari...
James Zadroga was a true super hero to the world
Published by Jennifer Weinstein on December 12th 2011 | Business
James Zadroga was a very courageous man, he didn’t care about his own life and rescued people duri...
Get updates about world news
Published by Nidhigupta on May 12th 2012 | Business
How much ever we deny it the fact is that the whole world is connected to each other and any event t...
The advantages and disadvantages of bollywood news
Published by Nidhigupta on July 17th 2012 | Business
Today news is considered and is indeed a very strong and the most popular weapon which is used by th...
The progress India news today has made
Published by Nidhigupta on June 20th 2012 | Business
India, as we all know, is a very unpredictable country. Anything can happen anywhere and at anytime....
Dallas Pool Contractors : - We have provides Best services in the world like Houston and Phoenix Pool Contractors.
Published by Microcell Systems on January 20th 2012 | Business
Premier Pool and Spas is a conductor in the state-of-the-art of pool design and contractors. Last 25...
Need of current business news
Published by Nidhigupta on May 14th 2012 | Business
A great importance is in the hands of stock market whenever a person decides to invest in stock mark...
Breaking news from the globe
Published by Nidhigupta on May 26th 2012 | Business
It is crucial for everyone in order to depend on day to use global news. We are able to acquire a gr...
HBO is world-renown for their award-winning original programming
Published by Xiaojuan on November 25th 2011 | Business
Fans of Doctor Who may be disappointed that their favourite Time Lord missed out on a best Drama Ser...
How latest world news matters to every individual
Published by Nidhigupta on July 10th 2012 | Business
The importance of latest world news has now been understood by all. Every person after going through...
Get newfangled current news online
Published by Nidhigupta on July 5th 2012 | Business
News can be state level news, national news and international news as well. A lot of people cling li...
Hot off the fire Bihar news
Published by Nidhigupta on June 15th 2012 | Business
Bihar lies in the eastern part of India. It is one of the oldest inhabited places in the world. It i...
Getting news headlines easily
Published by Nidhigupta on May 4th 2012 | Business
People are well known that there are several types of topics along with sports and political news he...
Why our olive variety Koroneiki produce the best extra virgin olive oil in the world
Published by Oliveoil on February 12th 2012 | Business
The origin of the olive tree and the fruit is lost in the depths of centuries. But certainly it’s ...
Get the Unlimited latest news online
Published by Nidhigupta on June 22nd 2012 | Business
People have developed a general awakening amongst them and are very much interested in raising their...
Business News makes people aware about happenings in the world of Business
Published by Nidhigupta on June 6th 2012 | Business
Lately, the world has found numerous types of alteration which is occurring at a very rapid speed. A...