Stronger Policy Coordination and Governance

8. We agree to make more active use of enhanced cooperation on
matters which are essential for the smooth functioning of the euro area,
without undermining the internal market.

9. We are committed to working towards a common economic policy. A
procedure will be established to ensure that all major economic policy
reforms planned by euro area Member States will be discussed and
coordinated at the level of the euro area, with a view to benchmarking
best practices.

10. Euro area governance will be reinforced as agreed at the Euro
Summit of 26 October. In particular, regular Euro Summits will be held
at least twice a year.

Strengthening the Stabilisation Tools

11. Longer term reforms such as the ones set out above must be
combined with immediate action to forcefully address current market
tensions.

12. The European Financial Stability Facility (EFSF) leveraging
will be rapidly deployed, through the two concrete options agreed upon
by the Eurogroup on 29 November. We welcome the readiness of the ECB to
act as an agent for the EFSF in its market operations.

13. We agree on an acceleration of the entry into force of the
European Stability Mechanism (ESM) treaty. The Treaty will enter into
force as soon as Member States representing 90 % of the capital
commitments have ratified it. Our common objective is for the ESM to
enter into force in July 2012.

14. Concerning financial resources, we agree on the following:
the EFSF will remain active in financing programmes that have started
until mid-2013 as provided for in the Framework Agreement; it will
continue to ensure the financing of the ongoing programmes as needed;

–we will reassess the adequacy of the overall ceiling of the EFSF/ESM
of EUR 500 billion (USD 670 billion) in March 2012;

–during the phasing in of the paid-in capital, we stand ready to
accelerate payments of capital in order to maintain a minimum 15% ratio
between paid-in capital and the outstanding amount of ESM issuances and
to ensure a combined effective lending capacity of EUR 500 billion;
–euro area and other Member States will consider, and confirm within 10
days, the provision of additional resources for the IMF of up to EUR 200
billion (USD 270 billion), in the form of bilateral loans, to ensure
that the IMF has adequate resources to deal with the crisis. We are
looking forward to parallel contributions from the international
community.

15. We agree on the following adjustments to the ESM Treaty to make
it more effective:

–Concerning the involvement of the private sector, we will strictly
adhere to the well established IMF principles and practices. This will
be unambiguously reflected in the preamble of the treaty. We clearly
reaffirm that the decisions taken on 21 July and 26/27 October
concerning Greek debt are unique and exceptional; standardised and
identical Collective Action Clauses will be included, in such a way as
to preserve market liquidity, in the terms and conditions of all new
euro government bonds. In order to ensure that the ESM is in a
position to take the necessary decisions in all circumstances, voting
rules in the ESM will be changed to include an emergency procedure. The
mutual agreement rule will be replaced by a qualified majority of 85% in
case the Commission and the ECB conclude that an urgent decision related
to financial assistance is needed when the financial and economic
sustainability of the euro area is threatened. (Subject to confirmation
by the Finnish parliament.)

16. We welcome the measures taken by Italy; we also welcome the
commitment of the new Greek government, supported by all parties, to
fully implement its programme, as well as the significant progress
achieved by Ireland and Portugal in implementing their programmes.

* * *

Some of the measures described above can be decided through
secondary legislation. The euro area Heads of State or Government
consider that the other measures should be contained in primary
legislation. Considering the absence of unanimity among the EU Member
States, they decided to adopt them through an international agreement to
be signed in March or at an earlier date. The objective remains to
incorporate these provisions into the treaties of the Union as soon as
possible. The Heads of State or Government of Bulgaria, Denmark, Latvia,
Lithuania, Poland and Romania indicated their intention to join in the
process. The Heads of State or Government of the Czech Republic and
Sweden are consulting their Parliaments before taking a decision.

[TOPICS: MGX$$$,MT$$$$,M$$EC,M$X$$$,M$$CR$,M$Y$$$]