EU LEADERS AGREE NEW FISCAL COMPACT COMMITMENTS - 23 European Union countries will forge ahead with a new intergovernmental treaty, which could include what is being termed as fiscal compact - a commitment not to breach budget guidelines. But Britain stays outside the deal - as does Hungary - and the Czech Republic and Sweden want to consult their parliaments before committing. Exhausted EU leaders will resume their deliberations again today - last night's discussions ran until 4am.
Ciaran O'Hagan, head of rates research at Société Générale in Paris, says the fact that an accord of any sort was reached so early in the two day summit is supportive. He says the meeting agreed to a series of measures to ensure that governments maintain their deficit reductions. The meeting also agreed to changes in the permanent bail-out fund, the ESM, capping its capacity at €500 billion. They also agreed to provide €200 billion in bilateral loans to the International Monetary Fund. These measures should help to calm tensions on world markets, the analyst says.
Mr O'Hagan says that the refusal by British Prime Minister David Cameron to back the move was not unexpected. He says the move is a result of the politics of the situation and he feels it really won't make a difference to the core euro zone plans.
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MORNING BRIEFS - On the currency markets the euro is worth $1.3288 and 85.22p sterling.
