EU summit mulls eurozone redesign

  • Business
  • Thursday, 18 Oct 2012

BRUSSELS: EU leaders will go into a brainstorming session today in the first of three summits being held before Christmas in the hope of ending the year with a deal on a stronger economic and monetary union.

Although pressure on the euro has eased in recent weeks, European Union leaders have to contend with a deepening recession and social unrest as well as divisions between Europe's major powers on how to ensure the euro single currency can survive the debt crisis.

One of the hot-button issues is the plan for a single European bank regulator, the first step towards allowing the new eurozone rescue fund, the European Stability Mechanism, to directly help ailing lenders.

The 17 eurozone states largely support the proposal, although serious differences over timing remain, but their non-euro peers are uneasy that their banks operating in the bloc might face new regulation without their say so.

Berlin has made clear that an idea for a single bank supervisor, agreed at a breakthrough June summit, needs to go slower and be less ambitious than some, including France, would like.

Britain in turn opposes any measure that could harm the interests of the City of London, one of the world's biggest financial markets.

Meanwhile, there is little expectation of a breakthrough on Greece's long drawn-out bailout at the two-day summit, where Spain's financial and political woes will be high in leaders' minds.

Many investors and analysts eventually expect a request for some form of bailout from the eurozone's fourth biggest economy. AFP

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