EU leaders agree verbally to take further steps to tackle debt

Friday 14 December 2012 23.38
EU leaders to push ahead with winding down problem banks keeping good parts alive
EU leaders to push ahead with winding down problem banks keeping good parts alive

European leaders have agreed to press on with further steps to shore up their finances and sustain momentum in tackling the debt crisis.

The agreement comes a day after clinching a deal on banking supervision and approving long-delayed aid to Greece.

Negotiations over a banking union led to the European Central Bank being agreed as chief supervisor of eurozone banks.

Leaders promised to push ahead with setting up a mechanism to wind down problem banks by keeping the good parts alive while the unhealthy operations are shut down during 2013.

They also launched tentative discussions on how to make countries stick to economic targets.

Discussions also centred on creating a "solidarity fund" to help member states suffering one-off economic shocks, but did not delve deeply into either issue, pushing the debate out to the middle of next year.

Officials are concerned about complacency creeping into decision-making now that financial markets have calmed and the crisis seems less acute.

As a result leaders appeared intent on showing that they are not relaxing.

However no concrete decisions were taken at the summit. Instead, it was more about verbal commitments to push ahead.

The two-day summit, the sixth and last of 2012, had only ever been intended to be a detailed discussion on how best to overhaul economic and monetary union.

It also aimed to correct the problems that have fuelled three years of debt crisis.

Earlier in the day, the European Central Bank was arranged to be made the chief supervisor of eurozone banks.

That decision, and another by eurozone ministers to release up to €50bn in new aid to Greece, marked two positive developments after a long year of crisis-management and took some of the pressure off leaders to make major strides.

ECB President Mario Draghi has hailed the deal on banking supervision.

He said it is the first stage towards a banking union with more pooled sovereignty, as an important step towards a stable economic and monetary union.

Under the deal, officials said the ECB would regulate some 150 to 200 banks directly.

All major cross-border lenders and state aided institutions - with the power to delve into all 6,000 banks in case of problems.

Creighton confident of Irish deal

Minister of State for European Affairs Lucinda Creighton has said she is confident a deal can be reached on the Anglo promissory notes by the March deadline.

Speaking on RTÉ’s News at One, she said that there was clear support from other European countries for a deal on the promissory notes negotiations were ongoing with the European Central Bank.

“We are very confident that we'll be able to arrive at a solution before the March deadline," Ms Creighton added.

Keywords: eu, summit, banks

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