BRUSSELS (MNI) – Following is the statement of European Council
President Herman Van Rompuy after the summit of Eurozone heads of state
Thursday:

“I am glad to announce that we found a common response to the
crisis situation. Our meeting was focussed: European leaders defending
the financial stability of the Euro area.

Today we reached three important decisions, fully supported by all
of us:

We improved the Greek debt sustainability;

We took measures to stop the risk of contagion.

We committed to improve the Eurozone’s crisis management.

I convened this summit of Heads of State or Government of the
Eurozone because the situation was really grave. I equally invited —
alongside the President of the ECB — the Managing Director of the IMF,
Mme. Lagarde to take part in the work.

The problems the Euro area is facing could only be solved at the
highest level. We had to act quickly. Convening this meeting focussed
the minds and accelerated finding a solution. I could not allow a
difficult situation to become a dangerous one.

From a series of national debt crises, the situation was evolving
into a systemic concern, threatening the stability of the Eurozone as
whole. This threat had to be contained, otherwise the situation could
have led to a serious loss of confidence in our common currency and
could even have jeopardised the ongoing economic recovery in Europe and
the world.

That’s why today we tackled the problem by addressing two main
factors:

investors’ fears that losses will be imposed on a non-voluntary
basis on bondholders in Greece and then maybe in other countries
as well, and

market uncertainty over the Eurozone’s ability to resolve the
crisis.

Let me comment todays decisions in more detail.

Firstly, we offer a solution to the Greek debt problem. We reached
agreement on a new assistance programme to fully cover the financing gap
and to be financed by both the EU and the IMF. Two other very important
steps are the agreement to reduce the interest rate for the future
loans, and to lengthen the maturities to a minimum of 15 years and up to
30 years.

The banks have today also committed to support Greece on a
voluntary basis, through a menu of options.

Importantly, we have changed the approach to PSI: private sector
involvement will be limited to Greece and Greece only.

This is a strong package. Secondly, we agreed on a series of
measures to stop contagion. To start, we stated clearly that the Greek
situation is different from that of other countries; thats why it
requires an exceptional response, including as regards the participation
of the private sector. In addition, the EFSF (Financial Stability
Facility) will get more flexibility to intervene: precautionary
assistance, recapitalisation of banks through governments, including in
non programme countries; and secondary market interventions in
exceptional circumstances on the basis of an analysis by the ECB.

So, if you want: we created a solid fire-wall and better
fire-brigade equipment.

Thirdly, we decided to improve the Eurozones governance. While
dealing with the short term, we do not forget the long-term. Let me
mention two points in particular:

We agreed that reliance of our own rules on external credit rating
agencies should be reduced.

Furthermore, we have received a mandate to make concrete proposals
on how to better organize crisis management in the euro area and to
improve working methods. I will work in close consultation with the
Presidents of the Eurogroup and the Commission, and present proposals in
October.

Today, with all these decisions, we have shown that we will not
waver in the defence of our monetary union and our common currency.

A final remark. When European leaders say that we will do
‘everything what is required’ to save the eurozone, it is very simple:
We mean it.”

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