Friday, December 17, 2010
Leaders of the 27 European Union countries, who held their record seventh summit so far this year in the Belgium capital Brussels on Thursday, approved a two-sentence amendment to the EU treaty at Germany's request to pave the way for creation of a European Stability Mechanism (ESM) in an effort to tackle financial crises effective June 2013, Reuters reported, quoting European Council President Van Rompuy.
The ESM, which replaces a temporary European Financial Stability Facility (EFSF) crafted in May, will require changes to EU's Lisbon Treaty, and has stipulated a string of strict measures for granting loans to debt-laden member states, with private sector bondholders sharing the cost of any write-downs.
However, the leaders brushed aside growing concerns that the existing rescue fund needs an increase in order to financially buttress countries such as Spain and Portugal if they plunge into a Greece-style economic bankruptcy.'
Posted by DotConnector at 07:29