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EU trumpets bank deal but bogs down on eurozone overhaul

14 December 2012, 12:26 CET
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EU trumpets bank deal but bogs down on eurozone overhaul

Monti - Schultz - Merkel - Photo EU Council

(BRUSSELS) - Europe's leaders wound up another crisis-hit year at their last 2012 summit Friday, trumpeting deals to save Greece and monitor banks but kicking ambitious proposals for further EU integration into a vague future.

The era of a divided crisis-hit European Union "is over", said French President Francois Hollande on joining his 26 counterparts for a second and final day of talks.

"Good work was completed throughout 2012 that enables us to be confident for 2013," he added.

But at another exhausting session into the early hours -- the seventh summit this year -- leaders dampened hopes of a swift deal to radically overhaul the eurozone, leaving plans for the future in the long grass of 2014 and beyond.

With European parliamentary elections and a new European Commission to be set up in 2014, "it'll be at that moment that a new stage can be broached, including a possible revision of the treaties", Hollande said.

Despite worries over political uncertainty in Italy, flagship plans to fix fundamental flaws criticised since the introduction of the single currency were put to one side until late 2014 at the earliest.

-- 'No doors closed' --

"No doors were closed," said Jose Manuel Barroso, the head of the executive European Commission.

Yet ideas heavily promoted by EU President Herman Van Rompuy over the last six months, including a central eurozone budget, seemed to fizzle out.

Van Rompuy said he would present another report to leaders in June 2013, as well as proposing that national governments sign up to contracts with the EU on reforms.

"All the hard work is beginning to pay off. A lot has been achieved over the course of a year," he insisted. "This work is not over: the dynamic will carry on in the coming year."

The resumption of loans to Greece followed a successful plan to wipe tens of billions of euros from the country's debt pile.

A first payment of 34.3 billion euros ($44.7 billion) will be flowing to Athens "as early as next week", said outgoing Eurogroup chair and Luxembourg Prime Minister Jean-Claude Juncker.

The accord prompted Greek Prime Minister Antonis Samaras to declare that "Grexit", the idea that Greece would be forced out of the 17-nation bloc, was "dead".

"Greece is back on its feet," declared an ecstatic Samaras, who has pushed through painful economic reforms demanded by international creditors, sometimes in the face of violent street protests.

Meanwhile, the deal for the eurozone's largest banks to come under the aegis of the European Central Bank from March 2014 was hailed by its head Mario Draghi as "an important step towards a stable economic and monetary union, and towards further European integration".

-- Closing ranks around Monti --

Despite a noticeably more positive tone at the summit, fears over Italy lurked in the background after Prime Minister Mario Monti, credited with important reforms there, said he was stepping down soon.

Former leader Silvio Berlusconi had hinted that he might stand for a fourth time but appeared to backtrack, telling Belgian television that he had "so much to do" outside politics.

Hollande downplayed the chance Berlusconi would run in a future election, saying: "I don't think there is a very serious likelihood" of this."

German Chancellor Angela Merkel highlighted the closing of ranks at the summit. "I made clear that the government of Mario Monti has done a great deal of helpful work for the confidence that Italy is now enjoying again," she said.

At the second day of talks, leaders were to discuss moves towards a common security and defence policy as well as to discuss the Syria crisis.

European Council conclusions on completing EMU

European Council

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