European Union leaders have agreed in principle that limited changes were needed to the bloc's treaty to accommodate Germany's call for the creation of a permanent system to handle debt crises, EU diplomats said.
‘There is a general agreement around the table that there will be a possibility of a limited treaty change, notably putting the euro area crisis mechanism on a more firm footing,’ one EU diplomat said.
A second diplomat confirmed the leaders had agreed at a summit that a limited treaty change should be made and were working on the exact wording of the mandate for European Council President Herman Van Rompuy to prepare such changes.
The diplomats said the mandate from the leaders would be in the form of a short text and would underline the need for the European Commission to be involved in the preparatory work.
Earlier Taoiseach Brian Cowen acknowledged that a permanent crisis mechanism is needed to deal with countries suffering a Greek-style debt crisis - but said any change to the Lisbon Treaty should be as narrowly focused as possible.
The mechanism, also known as an EU bailout fund, 'needed to be devised and to have a strong legal basis,' he said.
Germany, supported by France, has argued strongly that the temporary EU bailout fund agreed last May needs to be put on a permanent footing. It is due to lapse in 2013.
It also wants the option of EU voting rights being suspended if a country repeatedly breaches deficit and debt rules.
But Mr Cowen said that the possibility of suspending the voting rights of a country which breached deficit and debt rules was a 'non runner'.
The Taoiseach was speaking after a meeting of European liberal prime ministers in advance of the two-day EU summit.
The summit is likely to be dominated by the question of re-opening the Lisbon Treaty in order to establish a permanent stabilisation fund.
Mr Cowen said concerns about re-opening the Lisbon Treaty to the point where a referendum might be required would cause concern, but he said, those concerns were not confined to Ireland. 'It could open up other issues,' he warned.
There may be options to strengthen the rules to Germany's satisfaction through a future accession treaty, say that of Croatia, for example.
But there is a widespread feeling that a substantive re-opening of Lisbon will be a Pandora's box, especially at a time of rampant voter anger over austerity measures.
