Correspondent's Choice

This story about a permanent crisis resolution fund was published by EurActiv on 27th October 2010.

European Union heads of state will start discussions this week on a permanent crisis resolution mechanism amid persistent calls from Germany to introduce an orderly sovereign default procedure following the Greek debt crisis.

EU leaders are meeting in Brussels on 28-29 October to endorse proposals by a special task force to reform the bloc’s economic governance, according to draft summit conclusions obtained by EurActiv.

The task force, chaired by European Council President Herman Van Rompuy, who will host the two-day summit, gave its final report on 21 October, including measures to tighten surveillance on countries breaching the EU’s budget discipline.

But Germany wants to continue the discussion and introduce a procedure for orderly debt default, believing market pressure will force discipline on profligate governments.

The draft summit conclusions include an empty paragraph on “post-Task Force work,” which EU leaders will be invited to complete at the summit on Thursday and Friday.

Earlier this month, France and Germany called for a permanent system to handle crises in the euro zone by suspending EU voting rights for countries found to repeatedly breach EU budget rules.

The proposed changes would require changing the EU treaties, a perspective that found little traction among sceptical member states’ foreign ministers meeting in Brussels on Monday (25 October).

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