Wall Street Journal
January 30, 2012
European Union leaders gathered Monday to finalize accords on tighter fiscal discipline and a permanent bailout fund, even as a looming multibillion-euro debt-restructuring deal for Greece threatened to overshadow the talks.
Leaders are expected to sign off on the final text of a fiscal compact, supported by the majority of EU economies, that aims to prevent a repeat of the public-finance meltdowns that have dogged Greece, Portugal, Ireland and others.
Leaders are also likely to endorse a treaty creating the European Stability Mechanism, although a proposal to boost the size of the €500 billion (€661 billion) firewall is still being debated.
In a joint statement to be issued after the summit, the leaders will note that there have been "tentative signs" of economic stabilization in Europe but that financial-market tensions continue to weigh on the economy, according to a draft that is also expected to outline measures to support economic growth.
European Commission President José Manuel Barroso has promised to take steps to boost job creation and growth, including redirecting unused EU funds to tackle youth unemployment.
But Greece's debt crisis is once again taking center stage, even though a new bailout for the country isn't officially on the Monday agenda. Greek Prime Minister Lucas Papademos headed for Brussels after weekend talks with private creditors over a plan to write off €100 billion of the country's debt edged toward conclusion. On Sunday he won renewed commitment from Greek political leaders to pursue fresh reforms.