Oct 28 Following are extracts of a statement
made by Herman Van Rompuy, the president of the European
Council, after the first of a two-day summit of EU leaders.
Van Rompuy said the leaders had agreed to explore how to go
about making a limited change to the EU's main treaty to allow
for the creation of a permanent mechanism to deal with financial
crises and their impact.
EUROPEAN COUNCIL PRESIDENT HERMAN VAN ROMPUY
"Today we took important decisions to strengthen the euro
zone. We have endorsed the final report of the task force. We
have also found an agreement about the procedure to decide on a
crisis mechanism for the euro zone.
"This spring, we overcame a deep crisis of the Economic and
Monetary Union. Our next political duty was to draw the lessons
for the future to make the european economies more
"We recommend a robust and credible permanent crisis
resolution mechanism to safeguard the financial stability of the
euro zone as a whole.
"Today all heads of state and government agreed on that
need. Why? Because even if all the right budgetary and economic
measures are taken by everybody, one may never exclude
surprises. Politics is not a zero-risk business.
"Under pressure, a temporary crisis mechanism was
improvised. It will last for three years, until 2013. So we need
to think beyond that date, starting now.
"The guiding principles are clear. A permanent crisis
mechanism should be able to address financial distress and avoid
contagion from one country to another. It should also avoid
moral hazard. Now the question is whether such a robust crisis
mechanism requires a change of the treaty. There are legal
aspects and political considerations, both for individual member
states and for the union as a whole.
"Tonight we have had a good exchange of views on this and we
decided upon the following:
"Further to the report of the task force and in order to
ensure balanced and sustainable growth, heads of state and
government agree on the need for member states to establish a
permanent crisis mechanism to safeguard the financial stability
of the euro area as a whole and invite the president of the
European Council to undertake consultations with the members of
the European Council on a limited treaty change required to that
effect not modifying Article 125 (of the Lisbon treaty) -- the
no bailout clause.
"The European Council welcomes the intention of the
Commission to undertake in close consultation with the president
of the European Council, preparatory work on the general
features of a future new mechanism. It means the role of the
private sector, the role of IMF, and the very strong
conditionality under which such programmes should operate.
"The European Council will revert to this method at its
December meeting with a view to taking the final decision both
on the outline of a crisis mechanism and on a limited treaty
amendment so that any change can be ratified at the latest by
"The president of the European Council intends to
subsequently examine in consultation with the member states the
issue of the right to participate in decision-making in the
European Monetary Union-related procedures in case of a
permanent threat to the stability of the euro zone as a whole."