BRUSSELS (MNI)–European Union leaders concluded their summit in
Brussels on Friday by proclaiming they had achieved what they set out to
do in terms of providing a permanent crisis mechanism and reaching
agreements on how to tackle the current economic situation.

On more sensitive subjects — the bid by the European Central Bank
for member states to increase the capacity and flexibility of the
existing European Financial Stability Facility, and the development of a
joint Eurozone bond — leaders made no progress.

European Commission President Jose Manuel Barroso said the two-day
summit in Brussels “had delivered the right results.” He also claimed
that leaders had on Friday “confirmed important agreements reached
yesterday in open discussions about the current economic situation.”

In addition to the decision to support the euro via a permanent
mechanism, leaders agreed on the need for member states to tighten their
budgets, proceed with growth-enhancing reforms, get debt back under
control, give “the adequate financial support” for the euro, and clean
up the banking sector.

Leaders also expressed their support to Ireland for its efforts to
restructure after requesting an E85 billion bailout from the EU and the
IMF. “We realise they are delivering reforms and making important
progress,” said Barroso.

“All of this is what we mean when we say that we will do whatever
is required to support the euro area financial stability,” he said.

Concerning the development of a single European government bond
market, an idea put forward last week in a Financial Times editorial by
Luxembourg Prime Minister Jean-Claude Juncker and Italian Finance
Minister Giulio Tremonti, European Council President Herman Van Rompuy
hinted that he supported the idea but believed it was too early for such
a debate to take place.

He told reporters: “I have a personal opinion but I’m not going to
tell you. At this moment, that would be no contribution to the debate. I
think that, by the way, in general, like President Barroso wanted to
say, a good idea first must ripen, be talked through.”

Since the article by Juncker and Tremonti first appeared, Germany
and France have slammed the proposal. German Chancellor Angela Merkel
said that the discussion about such bonds, which would be jointly
guaranteed by the Eurozone, was unhelpful.

Van Rompuy said: “When the time is right [for a good idea], it
should then be brought out into the open. I think that when there is a
good idea, it does no service to give it publicity too early.”

He told reporters at the close of Thursday’s summit session that
there had been no discussion about the extension of the capacity or the
flexibility of the existing bailout mechanism. Diplomatic sources had
earlier told Market News International that European Central Bank
President Jean-Claude Trichet planned to raise the topic at last night’s
leaders’ dinner.

The talks were overshadowed by a quarrel sparked by the British
over the EU budget. The UK wants the budget to be frozen for the next
decade. UK Prime Minister David Cameron won the backing of French and
Germany but angered countries like Poland which are large beneficiaries
of the budget.

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