Local 130, EU leaders on Europe’s new financial agreement and the permanent fund to reach a consensus. Total of 5,000 million euros, “European stability mechanism” will come into effect in seven, the debt burden of the fund will provide support for the EU countries, will replace the existing “European financial stability mechanism.” There are 27 member states and 25 countries are in favor of the German authorities plan to strengthen budget discipline, but in the coordination of fiscal austerity measures and economic growth relationship is unable to reach agreement on the issue.

Experts believe that the summit’s focus is to restore economic growth and job creation strategy. European countries face the current situation is that governments have to cut public spending and raise taxes to cut debt. However, although the permanent fund and budgetary discipline to reach a consensus, but leaders in the fiscal austerity measures, there are still differences, plus Greece and private debt restructuring negotiations between creditors still not complete, making the EU difficult to bring to the market more optimistic signal.

ESM7 into effect

EU leaders have reached a consensus, the content is a total 500 billion euros (about $ 657 billion) of the “European stability mechanism” (ESM) will come into effect in seven, earlier than previously planned for a time, the fund will debt burden for the EU countries to provide support. However, the EU is facing from the United States, China, International Monetary Fund (IMF) and some members of the pressure on them to increase the size of this fund.

“European stability mechanism” will replace the existing temporary euro-zone assistance fund “European financial stability mechanism” (EFSF), but the resources of these two funds into one, creating a total of 750 billion euros (about $ 1 trillion) of the “super firewall,” the pressure is increased.

EU initially planned to introduce at 20137 ESM, but German urges early introduction of the mechanism to establish a more stable permanent fund, better able to resist the euro zone sovereign debt crisis.

IMF has also issued a statement that a firewall can increase the funding pool of the euro zone’s decision, it can persuade other countries to contribute more to IMF resources, increase their ability to combat the crisis and to improve market sentiment.

However, Germany opposed this. German “Der Spiegel” in the latest issue of the article commented: “European politicians have lost touch with reality, Greece has gone bankrupt, but Brussels officials in this country want to continue to enter ten billion euros loan, which has the same German coalition government’s position runs counter to the more. “

On Sunday, German officials made it clear, as the Greek aid scheme can not achieve the requirements of the euro area, it must be transferring control of its budget to external agencies. But this proposal as it involves violation of the sovereignty of Greece, was a strong reaction from the Greek, but the German side did not give up, and made not only for Greece but also other not receiving assistance in the case of countries to fulfill their obligations.

German Chancellor Angela Merkel said the summit was held until the 3, she will not discuss the ESM/EFSF the ceiling. “Of course, there are signals showed that the German will consider this issue, they are more willing to drag this issue three.” A senior official said the euro zone.

Course, Merkel would like to see in addition to other EU countries outside the United Kingdom to sign the new treaty finance, including the balanced budget rule into the Constitution. Once this is done, a larger discussion to the relief fund.

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