Wednesday, February 16, 2011

EU leaders have failed to narrow down their differences over a broad package of measures drafted to fight fiscal crisis in the bloc as the deadline looms for a deal.

The European Union finance ministers met in Brussels on Tuesday to try to reach an agreement on the proposed measures with no apparent success. The meeting, during which the ministers evaluated the six anti-crisis proposals, was held amid growing concerns that they might miss the deadline set for March 11 to resolve differences, a Press TV correspondent in Brussels reported. 

Hungarian Finance Minister Gyorgy Matolcsy, who chaired Tuesday's summit, stated that the evaluation raised 11 questions, only one of which was resolved at the meeting. 

The finance ministers agreed to set up a permanent eurozone rescue fund, known as the European Stability Mechanism (ESM), which will come into effect from January 1, 2013 and will have an initial capacity of 500 billion euros ($ 674 billion). 

The ESM, which replaces an existing 440-billion-euro European Financial Stability Facility, will require changes to the EU's Lisbon Treaty. It has stipulated a string of strict measures for granting loans to debt-laden member states, with private sector bondholders sharing the cost of any write-downs. 

However, some indebted countries such as Portugal and Spain have cried foul over the slow pace of plans to tackle the financial crisis gripping the EU countries. 

Portuguese Finance Minister Fernando Teixeira dos Santos lamented over the sluggish reform process, saying that "this slow pace and the sense of hesitation will affect the eurozone and efforts to stabilize the euro, and as a result, all those countries which are in the eurozone." 

Meanwhile, the Hungarian finance minister said the EU would "keep the deadlines" of March 11 for eurozone leaders and March 24-25 for a full EU summit to work out a deal on the comprehensive set of fiscal measures. 

The proposals also aim to establish a greater fiscal surveillance and economic harmonization among the different EU countries. Currently, the member states have different economic policies on various areas such as taxation and retirement age. 

Experts point out that these differences are making it hard for the bloc to ensure stability for its economy and common euro currency, which has so far been adopted by 17 member states. source

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