EU SUMMIT:EU LEADERS last night signed off on the text of a narrow revision to the Lisbon Treaty and reiterated their determination to do "whatever is necessary" to safeguard the euro zone's stability.
As their seventh summit of the year in Brussels was again dominated by the sovereign debt crisis, they agreed to explicitly reserve the fund for “last resort” interventions to prop up weakened members of the single currency.
In doing so they yielded to German and British demands to strengthen the agreed text of a treaty revision to facilitate the creation of a permanent euro zone bailout fund.
“To our knowledge there is no referendum needed in any member state,” European Council president Herman Van Rompuy told reporters shortly before midnight.
While Mr Van Rompuy’s declaration of the leaders’ willingness to take whatever steps were needed to safeguard the currency was taken as an implicit signal that they might enlarge the euro zone’s €440 billion temporary bailout scheme, he said that did not arise at this time because only 4 per cent of the fund has been deployed in Ireland’s rescue.
European Commission chief José Manuel Barroso said the leaders recognised that their efforts to shore up their public finances were difficult and had effects for society, but added that “the measures are necessary as they will put their economies back on track”.
Mr Barroso said the measures taken to date were radical and unforeseen at the outset of the crisis. “The question is: is this enough? I think the important answer given today is that we are ready to do everything that is necessary.”
Mr Van Rompuy said the deal on the revision of the treaty was struck after a 90-minute discussion.
This came as the leaders bowed to a demand from German chancellor Angela Merkel to rework a text agreed last week by senior EU diplomats.
While Dr Merkel pushed to include the Latin expression for last resort – ultima ratio – in the treaty revision, that was ruled out as Latin is not a language of the union and because such a reference was deemed vulnerable to legal challenge.
“The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro as a whole,” read the text agreed last night.
This marked a change from the earlier version which did not include the words “to be activated if indispensable”.
The second sentence they agreed said “the granting of any required financial assistance under the mechanism will be made subject to strict conditionality”.
The word “any” was added to the original proposal.
Late haggling over the text came as Taoiseach Brian Cowen signalled the Government’s belief that the revision will not necessitate a referendum in Ireland.
The leaders will change the treaty by deploying a revision procedure reserved for manoeuvres which do not increase the competences of the EU. They can do this because the permanent fund will operate as an inter-governmental body, outside the ambit of the EU institutions.
In addition, EU leaders agreed to say in the formal “recital” of their decision that the treaty article under which the commission is providing aid to Ireland cannot be used when creating the permanent fund.
This followed pressure from British prime minister David Cameron, who wanted to ensure there was no further draw from the EU budget for bailouts for euro zone members.
He had yet to take office last May when the outgoing Labour government agreed to include a €60 billion credit line controlled by the commission in the temporary rescue scheme.