BRUSSELS (MNI) – The 17 members of the Eurozone and six non-euro
area members have reached an agreement for an intergovernmental treaty
that will strengthen the current fiscal rule and the excessive deficit
procedure, President of the European Council Herman Van Rompuy said
early Friday.

Speaking at a press conference following a night of deliberations
among EU leaders, Van Rompuy explained that since there was no unanimity
among the 27 member states, a full treaty change was not possible.

Van Rompuy said that the heads of state decided measures “for the
short term and the long term to address the crisis.”

“As an immediate action the euro area and other member states will
aim at getting additional resources of up to E200 billion to the IMF.
The EFSF leverage will be rapidly deployed and the ESM will enter into
force in July 2012,” the European Council president explained.

Furthermore, EU leaders decided to abandon Private Sector
Involvement (PSI) as it was practiced in the case of Greece, admitting
that it did not produce positive results.

“Regarding the PSI involvement, we have made a major change to the
doctrine. We are now sticking to the IMF principles and practices. Our
first approach to PSI, which had a negative impact to the debt markets
is now officially over,” Van Rompuy underlined.

As regards the new fiscal compact, the 23 countries declared their
commitment “to new European strong fiscal rule to be enforced by their
constitution or an equivalent,” Van Rompuy said.

He went on to explain that the excessive deficit procedure will be
automatic and members states will submit their budgets to the Commission
for review.

“Of course talking about legal changes in the European Union is not
easy. Therefore, the 17 Eurozone members plus six others will sign an
inter-governmental treaty.” Van Rompuy said that this kind of treaty can
be approved rapidly.

Jose Manuel Barroso, president of the EU Commission, said at the
same briefing that “the fiscal compact is an important result” and that
the new fiscal rule is more ambitious than the previous one.

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