BRUSSELS (MNI) – The following is the full text of remarks by
European Council President Herman Van Rompuy after the meeting of EU
leaders Wednesday:

At today’s meeting, I informed the members of the European Council
about the state of preparations of the Euro Summit that will take place
later in the day. We discussed the situation and all leaders underlined
their common resolve to do their utmost to overcome the crisis and to
help face in a spirit of solidarity the challenges confronting the
European Union and the Euro area.

The members of the European Council welcomed the consensus on
measures to restore confidence in the banking sector reached by the
Council (ECOFIN) on 22 October. The banking measures form part of a
broader package, alongside the decisions to be taken by today’s meeting
of the Euro Summit, and are subject to its full approval. The Council
(ECOFIN) will finalise the work and adopt the necessary follow up
measures. The consensus concerns both the banks’ short-term and
longer-term needs. The overarching goal of the exercise is to foster
confidence in the European banking sector.

Improved access of the banks’ medium- and long-term funding is
essential to avoid a credit crunch and to safeguard the flow of credit
to the real economy. States will provide guarantees enabling banks to
raise term funds. We decided to rely on a truly coordinated approach at
EU level regarding the conditions and criteria.

Short term recapitalisation is needed in the current exceptional
circumstances to create a temporary buffer allowing the banking system
to withstand shocks in a reliable manner. Agreement has been reached
that banks should be required, by 30 June 2012, to have 9 % of the
highest quality capital. This figure should take into account a marking
down for sovereign bond holdings against current market prices (as of 30
September 2011). Banks should raise capital in the first place from
private sources, and only if that is not possible, seek support from
national governments. If the latter support is not available without
creating systemic risks for the Eurozone, the EFSF should provide the
loans for recapitalisation.

Any form of public support, whether at a national or EU-level, will
have to comply to the rules of the state aid crisis framework. The
Commission has indicated it will be applied with the necessary
proportionality in view of the systemic character of the crisis. With
these measures, we restore confidence and put Europe’s banking sector on
a sound footing.

** Market News International Brussels **

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