BRUSSELS (MNI) – European Union leaders on Friday acknowledged
their disappointment that the UK’s veto of a plan to enshrine new fiscal
rules in the EU treaty will complicate the institutional workings of the
27-nation union, but they expressed confidence that the tough new
measures could be implemented more quickly as a result.

“Our preference was for full-fledged treaty change with the 27,”
said Herman Van Rompuy, the president of the European Council of EU
leaders, at the end of a grueling two-day summit here. “We tried it, but
because a unanimous decision was not possible, we have to take another
decision,” he said.

“This formula has some handicaps but we will try to overcome them,”
he said.

The UK was alone in rejecting the proposed treaty changes outright,
as the nine other non-Eurozone EU countries have either pledged to adopt
the new rules or to put them to a vote in their national parliaments,
Van Rompuy said.

“It is even possible that we have some kind of international treaty
with 26,” although this is a “hypothesis” that has not been verified, he
said.

The new fiscal rules and the EU’s backing for an accelerated launch
of the European Stability Mechanism, and for a E200 billion increase in
IMF resources, sends “a clear political message to the outside world,”
Van Rompuy said. The deal will be made “as binding as is possible,” the
chair of the EU leaders’ summit said.

“From an institutional view it would have been much more simple if
we could have all member states agreeing”, but the fact that the
existing treaty won’t be changed will most likely make things go more
quickly, said Jose Manuel Barroso, the President of the European
Commission.

UK Prime Minister David Cameron early Friday morning rejected the
deal pushed primarily by Germany and France, saying it was “not good
enough for Britain.” He implied that the UK’s opt-out could prevent the
EU’s existing institutions from serving the majority grouping.

Polish Prime Minister Donald Tusk, cautioned that member states
signing up to the new fiscal rules will still need to secure the support
of their national parliaments. “Ratification is a provided by
constitutional agreements in each member state. In each member state a
majority is needed for this action to happen,” he said.

Jyrki Katainen, the Prime Minister of Finland, struck a note of
cautious optimism: “no one knows” if the crisis is over but “this could
be the beginning of the end,” he said. EU leaders have “managed to build
a stronger rule base for the euro and remove the weaknesses of the
euro,” he said, adding that he was “really satisfied” by the summit’s
results.

–Brussels bureau: +324-9522-8374; pkoh@marketnews.com

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