January 31, 2012 in Business

Eurozone debt treaty gets support

Leaders pledge to push growth, employment
Sarah Dilorenzo Associated Press
 

BRUSSELS – All European Union countries except Britain and the Czech Republic agreed Monday to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc’s crippling debt crisis, while EU leaders also pledged to stimulate growth and employment.

The new treaty, known as the fiscal compact, was agreed to at a summit of European leaders in Brussels on Monday. It includes strict debt brakes and makes it more difficult for deficit sinners to escape sanctions. The 17 countries in the eurozone hope the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control.

“We have a majority of 25 that will now sign up to the fiscal compact,” Swedish Prime Minister Fredrik Reinfeldt said Monday night after the summit of European heads of government in Brussels.

Although the new rules only apply to the 17 euro states, the currency union wants to get broad support from the other EU states, in hopes the accord will eventually be integrated into the main EU treaty.

Britain had said in December it wouldn’t sign the new treaty. Reinfeldt said the Czech Republic didn’t sign because of parliamentary procedural problems.

“I don’t want to stand in the way of what they think they should do,” British Prime Minister David Cameron said of the other countries. “But this is not an EU treaty because I vetoed that.”

Leaders at the summit also promised to stimulate growth and create jobs across the region, an acknowledgment that their exclusive focus on austerity has had painful side effects.

“Yes we need discipline, but we also need growth,” said Jose Manuel Barroso, the president of the European Commission, the EU’s executive arm.

The leaders pledged to offer more training for young people to ease their transition into the workforce, to deploy unused development funds to create jobs, to reduce barriers to doing business across the EU’s 27 countries and ensure that small businesses have access to credit.

However there was no offer of any new financial stimulus.

“We must do more to get Europe out of the crisis,” the leaders said in a statement.

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