Dinar Daily
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Latest topics
» Deadly stampede could affect Iraq’s World Cup hopes 1/19/23
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Mar 27, 2024 6:02 am by Ditartyn

» Dave Schmidt - Zim Notes for Purchase (NOT PHYSICAL NOTES)
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeSat Mar 23, 2024 9:25 am by swizzlestick

» ZIGPLACE
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Mar 20, 2024 6:29 am by Zig

» CBD Vape Cartridges
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeThu Mar 07, 2024 2:10 pm by Arendac

» Classic Tony is back
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeTue Mar 05, 2024 2:53 pm by Mission1st

» THE MUSINGS OF A MADMAN
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Mar 04, 2024 11:40 am by Arendac

»  Minister of Transport: We do not have authority over any airport in Iraq
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Mar 04, 2024 11:40 am by Verina

» Did Okie Die?
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Mar 04, 2024 11:34 am by Arendac

» Hello all, I’m new
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Jan 31, 2024 8:46 pm by Jonny_5

» The Renfrows: Prophets for Profits, Happy Anniversary!
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Jan 31, 2024 6:46 pm by Mission1st

» What Happens when Cancer is treated with Cannabis? VIDEO
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Jan 31, 2024 8:58 am by MadisonParrish

» An Awesome talk between Tucker and Russell Brand
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Jan 31, 2024 12:16 am by kenlej

» Trafficking in children
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Jan 29, 2024 7:43 pm by kenlej

» The second American Revolution has begun, God Bless Texas
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Jan 29, 2024 6:13 pm by kenlej

» The Global Currency Reset Evolution Event Will Begin With Gold, Zimbabwe ZWR Old Bank Notes
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeSun Jan 28, 2024 3:28 pm by Mission1st

» Tucker talking Canada
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Jan 24, 2024 6:50 pm by kenlej

» Almost to the end The goodguys are winning
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Jan 22, 2024 9:03 pm by kenlej

» Dinar Daily Facebook Page
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeMon Jan 22, 2024 3:34 pm by Ponee

» The Fundamentals of Finance and Pimpy Live
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeThu Jan 18, 2024 7:17 am by Dinarhater

» Why Won't the Iraqi Dinar Scam Die?
EU leaders commit to new "fiscal compact": draft  I_icon_minitimeWed Jan 17, 2024 5:19 pm by RamblerNash

EU leaders commit to new "fiscal compact": draft

Go down

EU leaders commit to new "fiscal compact": draft  Empty EU leaders commit to new "fiscal compact": draft

Post by lexie Thu Dec 08, 2011 9:07 pm

Dec 08, 2011 17:24 EST

EU leaders commit to new "fiscal compact": draft


BRUSSELS (Reuters) - EU leaders are committed to a new "fiscal compact" for the euro zone, including much tighter control of public finances and, in the longer term, could consider joint debt issuance, an early draft of conclusions at an EU summit said on Thursday.

Key elements were, however, immediately rejected by Germany.

"The stability and integrity of the Economic and Monetary Union and of the European Union as a whole require the swift and vigorous implementation of the measures already agreed as well as further qualitative moves towards a genuine 'fiscal union' in the Euro area," said the draft obtained by Reuters.

The draft showed the euro zone agreed to bring forward the launch of its permanent bailout fund, the European Stability Mechanism, to July 2012, and give it a banking license.

The draft also said that both the temporary bailout fund, the European Financial Stability Facility (EFSF) and the ESM, could run in parallel for a year from mid-2012.

The maximum lending capacity of the ESM, set at 500 billion euros, would not be diminished by the amount of money already spent by the EFSF, as was the initial plan, the draft said.

But Germany opposed proposals such as giving the ESM a banking license, issuance of common euro zone debt and allowing the parallel functioning of the EFSF and ESM, a senior German source said.

A banking license for the ESM would give the bailout fund access to European Central Bank liquidity lines, bolstering its ability to tackle the euro zone debt crisis. The draft conclusions also said the ESM should have the ability to directly recapitalize banks.

A euro zone official said earlier on Thursday that would help governments keep down deficits, which would not be inflated by the costs of recapitalizing banks.

Euro zone leaders agreed earlier this year that the ESM would have paid-in capital of 80 billion euros and callable capital of 620 billion euros. They had decided that the paid-in capital would be provided over five years.

The draft showed that the leaders were now ready to pay up more quickly.

"During the phasing in of the paid-in capital, we stand ready to accelerate payments of capital in order to maintain a minimum 15 percent ratio between paid-in capital and the outstanding amount of ESM issuance," the draft said.

To reassure investors that they will never again be asked to take voluntary losses on euro zone bonds, euro zone leaders declared that the ESM would strictly follow International Monetary Fund rules on private sector involvement in any potential debt restructuring.

They also "clearly reaffirm" that the Greek case was unique and exceptional.

The draft also said that voting in the ESM would be changed to include an emergency procedure, which would replace unanimous decisions with a qualified majority of 85 percent -- a change sought by France and Germany but opposed by Finland.

But this would happen only if the European Commission and the European Central Bank said that "an urgent decision related to financial assistance is needed to safeguard the financial and economic stability of the euro area," the draft said.

Finally, euro zone leaders declared in the draft that they stand ready to provide to the IMF with additional money, with the amount left blank, in bilateral loans to ensure that the IMF has adequate resources to deal with the crisis.

"The Euro area is looking forward to parallel contributions from the international community," the draft said.

A senior euro zone source said earlier the amount from the euro zone would be 150 billion euros and expectations of non-euro zone contributions were for around 50 billion.

FISCAL UNION

"We agreed today on a new 'fiscal compact' and on significantly stronger coordination of economic policies in areas of common interest," the draft declaration said.

The draft said this would entail establishing a new fiscal rule, under which government budgets would have to be balanced, which would mean that after stripping out one-off revenues and expenditures and the swings of the economic cycle, the structural deficit would not be higher than 0.5 percent of GDP.

Only countries with a debt/GDP ratio significantly below 60 percent could be allowed higher structural deficits.

The balanced budget rule would also have to be introduced into constitutions of euro zone countries and include automatic correction steps to bring the deficit down. The European Union's highest court would have the right to verify that the rule is transposed in national legislation.

Euro zone countries which had budget deficits higher than the EU ceiling of three percent of GDP would have to submit to the European Commission and euro zone finance ministers a plan of structural reforms to durably reduce the shortfall.

The implementation of the plan would be monitored by the Commission and the ministers. Euro zone countries would also have to report their debt issuance plans ahead of time.

If a country breaches the three percent deficit limit, it would automatically face sanctions unless a qualified majority of euro zone finance ministers decide otherwise.

The draft said that leaders agreed to quickly give the European Commission new powers to monitor and assess budget drafts of euro zone countries with deficits above three percent.

"The Commission will in particular examine the key parameters of the draft budgetary plans and will, if needed, adopt an opinion on these plans," the draft said.

"In case the Commission identifies particularly serious non-compliance with the Stability and Growth Pact (EU budget rules), it will request a revised draft budgetary plan," the draft said.

The draft said that for the longer term, the euro zone would continue to work on deepening fiscal integration to better reflect the interdependence of euro zone countries.

"This will imply more intrusive control of the national budgetary stance by the EU, such as the ex ante approval of budgetary plans," the draft said.

"In this context, the possibility of moving towards common debt issuance in the longer term and in a staged and criteria-based process, should be considered, once significant progress will have been made in reinforcing fiscal rules and discipline," said the draft of the point that is being rejected by Germany.




http://www.newsmeat.com/news/meat.php?articleId=124122656&channelId=2951&buyerId=newsmeatcom&buid=3281

*****************
"WHEN THE POWER OF LOVE OVERCOMES THE LOVE OF POWER, THE WORLD WILL KNOW PEACE"
lexie
lexie
Elite Member
Elite Member

Posts : 1812
Join date : 2011-06-24

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum