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Europe moves ahead without UK

Friday, December 09, 2011 - 02:25

Dec. 09 - Europe divided at a summit on Friday, in an historic rift over building a closer fiscal union to preserve the euro, with all 27 EU members apart from Britain agreeing to put together a separate treaty. Joanna Partridge reports.

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At least one European leader left the Brussels summit happy. The meeting of EU leaders had been billed as the most important for years as they put their heads together to find a solution to the euro zone debt crisis. The outcome sees Europe divided. 26 of the 27 European countries, led by France and Germany, agreed to build closer fiscal union to safeguard the euro. Only Britain, the EU's third-largest economy, will definitely not sign the new treaty after it wasn't able to secure concessions to protect its financial industry. SOUNDBITE: BRITISH PRIME MINISTER, DAVID CAMERON, SAYING (English): "We're a trading nation and we need the single market because we want that market open for our goods, our services, our growth, our investment, our jobs, that's what, for us, Europe is all about and that will continue. But, we had a choice: did we want to sign a new treaty, with huge amounts of extra complexity and bureaucracy and all the rest of it, that would go into our existing treaty, did we want to do that without proper safeguards for Britain. If I couldnt' get those safeguards, I said I wouldn't sign that treaty, I didn't, so I didn't." The majority of the 27 EU members will now bring in stricter budget rules. SOUNDBITE: German Chancellor, Angela Merkel, saying (German): "We achieved an important step towards a long-term stable euro. You can say it's the breakthrough to the union of stability. The stability union, the fiscal union will be developed step by step in the next years but the breakthrough has been achieved." Merkel might be happy with the outcome, but some investors remain unconvinced. A new treaty could take three months to negotiate and may require referendums in some countries. The leaders also capped the permanent bailout fund, the European Stability Mechanism, at 500 billion euros, which will come into force in a year early in July 2012. And - perhaps more significantly - gave the green light to the euro area to provide the IMF with up to 200 billion euros in bilateral loans. Those funds could then be loaned back to Europe to help Italy and Spain refinance early next year. But without renewed investor confidence Rome and Madrid may still struggle. And it's still not clear what role the ECB will play in supporting countries that run into trouble. Joanna Partridge, Reuters

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Europe moves ahead without UK

Friday, December 09, 2011 - 02:25