EU leaders agree to ′limited′ changes to bloc′s main treaty | Europe| News and current affairs from around the continent | DW | 29.10.2010
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EU leaders agree to 'limited' changes to bloc's main treaty

European Union leaders agreed to the principle of 'limited' changes to the bloc's main treaty to keep member states' deficits in line, but the road to reforming the document could become a political nightmare.

The Lisbon Treaty laid out on an EU flag

Merkel succeeded in convincing EU partners to agree to changes

The 27 leaders of European Union member states on Friday gave way to German demands to slight amendments to the bloc's guiding Lisbon Treaty in order to prevent future debt crises.

The announcement came early in the morning after seven hours of intense talks at the start of a two-day EU summit in Brussels. German Chancellor Angela Merkel said the leaders had had a "profound and difficult discussion," and other participants described the discussions as heated and emotional.

Merkel added that she was satisfied with the outcome of the debate: "We have promoted our essential points," she said. "Everyone is in agreement that a limited change to the Lisbon Treaty is necessary."

EU Council President Herman Van Rompuy told a news conference that "important decisions to strengthen the eurozone" had been taken. "We recommend a robust and credible permanent crisis resolution mechanism to safeguard the financial stability of the eurozone as a whole," he said.

Herman Van Rompuy

Van Rompuy is now charged with proposing the amendments

Merkel stressed that the current, limited protection of loan guarantees for euro states was not a permanent solution under the current treaty conditions. She said the new crisis mechanism would only be "valid for cases where the stability of the euro as a whole is at risk."

"We said once more that ... should a country ever need to make use of this, it would be faced with very strict requirements," she said.

Opposition to budget increase

Some non-eurozone states threw around their weight in the discussions, like the United Kingdom, which sought to cap the EU's budget next year, and Poland, which wants the calculation of its national debt to take into account costly pension reforms.

Merkel chimed in, saying, "If we have to reduce our budget at home - we do this at the federal level by more than 3 percent - it cannot be that the European budget rises by nearly 6 percent."

The leaders asked Van Rompuy to prepare potential changes to the Lisbon Treaty ahead of another EU summit in December. The changes are to be agreed on by mid-2013, the expiration date of a 750-billion euro ($1 trillion) fund set up last May to reassure markets that Greece's debt crisis would not spill over to the rest of the continent.

Tough reform process

Nicolas Sarkozy and Angela Merkel

Sarkozy and Merkel jointly proposed tough sanctions on overspenders

Germany, Europe's largest economy, led the calls at the summit for tougher penalties on states that exceed the eurozone's limit on budget deficits of 3 percent of gross domestic product.

Merkel and French President Nicolas Sarkozy had called for the suspension of voting rights of members who flout budget rules, but such a reform was unpopular with several smaller states.

"If treaty change is to reduce the rights of member states on voting, I find it unacceptable, and, frankly speaking, it is not realistic," European Commission President Jose Manuel Barroso said.

It would also likely turn into a political nightmare for national governments. The Lisbon Treaty took 10 years of wrangling to enact, after challenges in national courts and referendum failures in France, Ireland and the Netherlands.

"Many countries do not want a huge treaty reform, and therefore we are trying to narrow it down to a very limited treaty change that should be acceptable for countries without having to face referendums," Swedish Prime Minister Fredrik Reinfeldt said.

Although the proposals were weaker than Merkel had pushed for, she said the EU had underlined that "private investors will not be able to make money or speculate against the euro."

Author: Andrew Bowen, Darren Mara (AFP, Reuters, dpa)
Editor: Nancy Isenson

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