Eurozone crisis: Late night summit talks to save euro

BBC News
8 Dec 2011

(As of 10:18 PM EST) EU leaders are locked in late night talks at a summit called to tackle the eurozone debt crisis.

The key item on the agenda in Brussels is a Franco-German plan on budgetary discipline, with automatic penalties for eurozone nations that overspend.

Reports say Berlin and Paris failed to secure backing from all 27 EU members to change the bloc’s treaties to proceed with reforms.

Any deal will now likely involve only the 17 eurozone members.

World shares have fallen after the European Central Bank ruled out any substantial aid for indebted nations.

The US Dow Jones index closed down 1.6%. French and Italian shares ended down 2.5% and 4.3% respectively. Shares on Asian markets opened lower on Friday.

Just before the summit started on Thursday, UK Prime Minister David Cameron, French President Nicolas Sarkozy and German Chancellor Angela Merkel held 45-minute talks, but sources told the BBC there was “no movement” with each side setting out their respective ground.

UK Prime Minister David Cameron has repeatedly warned he will veto anything which harms British interests…

The article continues at BBC News.

Analysis

image of Chris MorrisChris Morris, BBC News, Brussels

Germany and France seem to be coming into this summit saying: “Here’s the deal – take it or leave it.” Germany in particular is becoming Europe’s most important political power, as well as its most important economic one – and that is causing some unease.

But President Sarkozy defended Franco-German leadership and – using dramatic language – said memories of brutality between them during World War Two mean they have a special duty to act.

The trouble is the European Union is much bigger than it was. Every country – all 27 of them – has a red line somewhere. That is why reaching an agreement is going to be so difficult.

But Angela Merkel has made it clear that she wants a treaty change of some kind. She would prefer all member states to be involved, but at the very least the 17 countries in the eurozone have to act.

Beyond the battle over treaty change there is a bigger picture for the leaders gathered here. Can they find more financial firepower to help member states with huge debts? And can they persuade the markets that struggling countries are serious about years of austerity?

In other words, can they do enough to ensure that the eurozone survives.

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Update: Here’s everything that’s happened so far in the EU summit, at Business Insider

Update 2: Some tasteless comic relief: a video from Hitler’s Bunker, via TigerHawk.

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