German chancellor Angela Merkel arrives for day two of the summit in Brussels on Friday. (Photograph: John Thys/AFP/Getty Images)
Jun 29, 2012
Eurozone leaders debated long into the night in Brussels, but daybreak on Friday saw a tentative agreement in which both Spain and Italy seemed content with their ability to break down Germany's resistance to 'softer bailout conditions' for their lagging economies and all countries have agreed in principle to strengthen the financial coordination of the 17-member economic bloc moving forward.
EU president Herman Van Rompuy called the deal a "real breakthrough". The key development in the agreement was that the European bailout fund will be allowed to offer assistance directly to troubled banks without demanding that those loans be funneled through the bank's respective government. This will allow private banks to borrow without impacting the sovereign debt of their country or create burdens on already stressed state budgets.
In addition, the deal would allow for centralized bailout funds to be allocated more "flexibly" which would, in theory, also relax the cost of borrowing for national economies, who have been battered by skyrocketing prices in the private bond market. And lastly, the deal paves the way for the creation of single supervisory body - housed inside the ECB - that would oversee all banks in the Eurozone.
And lastly, the deal promises the creation and funding of a 'growth pact' which would fund employment efforts across the member nations' economies.
"The growth pact," according to reporting in The Guardian, "Has been pushed mainly by France and it is the troubled economies of the Eurozone, such as Italy and Spain, who are keenest to promote it in an attempt to turn the tide on the German emphasis on austerity and fiscal discipline."
Newly elected socialist President of France, Francois Hollande, praised the deal and said leaders had defined a "vision for the euro" with greater solidarity.
# # #
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, The U.S. is on a fast track to authoritarianism like nothing I've ever seen. Meanwhile, corporate news outlets are utterly capitulating to Trump, twisting their coverage to avoid drawing his ire while lining up to stuff cash in his pockets. That's why I believe that Common Dreams is doing the best and most consequential reporting that we've ever done. Our small but mighty team is a progressive reporting powerhouse, covering the news every day that the corporate media never will. Our mission has always been simple: To inform. To inspire. And to ignite change for the common good. Now here's the key piece that I want all our readers to understand: None of this would be possible without your financial support. That's not just some fundraising cliche. It's the absolute and literal truth. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. The final deadline for our crucial Summer Campaign fundraising drive is just days away, and we’re falling short of our must-hit goal. Will you donate now to help power the nonprofit, independent reporting of Common Dreams? Thank you for being a vital member of our community. Together, we can keep independent journalism alive when it’s needed most. - Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Eurozone leaders debated long into the night in Brussels, but daybreak on Friday saw a tentative agreement in which both Spain and Italy seemed content with their ability to break down Germany's resistance to 'softer bailout conditions' for their lagging economies and all countries have agreed in principle to strengthen the financial coordination of the 17-member economic bloc moving forward.
EU president Herman Van Rompuy called the deal a "real breakthrough". The key development in the agreement was that the European bailout fund will be allowed to offer assistance directly to troubled banks without demanding that those loans be funneled through the bank's respective government. This will allow private banks to borrow without impacting the sovereign debt of their country or create burdens on already stressed state budgets.
In addition, the deal would allow for centralized bailout funds to be allocated more "flexibly" which would, in theory, also relax the cost of borrowing for national economies, who have been battered by skyrocketing prices in the private bond market. And lastly, the deal paves the way for the creation of single supervisory body - housed inside the ECB - that would oversee all banks in the Eurozone.
And lastly, the deal promises the creation and funding of a 'growth pact' which would fund employment efforts across the member nations' economies.
"The growth pact," according to reporting in The Guardian, "Has been pushed mainly by France and it is the troubled economies of the Eurozone, such as Italy and Spain, who are keenest to promote it in an attempt to turn the tide on the German emphasis on austerity and fiscal discipline."
Newly elected socialist President of France, Francois Hollande, praised the deal and said leaders had defined a "vision for the euro" with greater solidarity.
# # #
Eurozone leaders debated long into the night in Brussels, but daybreak on Friday saw a tentative agreement in which both Spain and Italy seemed content with their ability to break down Germany's resistance to 'softer bailout conditions' for their lagging economies and all countries have agreed in principle to strengthen the financial coordination of the 17-member economic bloc moving forward.
EU president Herman Van Rompuy called the deal a "real breakthrough". The key development in the agreement was that the European bailout fund will be allowed to offer assistance directly to troubled banks without demanding that those loans be funneled through the bank's respective government. This will allow private banks to borrow without impacting the sovereign debt of their country or create burdens on already stressed state budgets.
In addition, the deal would allow for centralized bailout funds to be allocated more "flexibly" which would, in theory, also relax the cost of borrowing for national economies, who have been battered by skyrocketing prices in the private bond market. And lastly, the deal paves the way for the creation of single supervisory body - housed inside the ECB - that would oversee all banks in the Eurozone.
And lastly, the deal promises the creation and funding of a 'growth pact' which would fund employment efforts across the member nations' economies.
"The growth pact," according to reporting in The Guardian, "Has been pushed mainly by France and it is the troubled economies of the Eurozone, such as Italy and Spain, who are keenest to promote it in an attempt to turn the tide on the German emphasis on austerity and fiscal discipline."
Newly elected socialist President of France, Francois Hollande, praised the deal and said leaders had defined a "vision for the euro" with greater solidarity.
# # #
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.