Monti: Meeting Paves Way For Effective E.U. Summit
For weeks now, possible efforts have been discussed across the E.U. for measures to drive economic growth. On Thursday, Merkel's center-right government agreed to a "pact for sustainable growth and employment." Under the plan, unspent money from existing funds will be used to foster growth. There is also general agreement over calls to increase the capital of the European Investment Bank, the E.U.'s financing institution, by €10 billion in order to give it greater lending capacity.
The plans also envision so-called project bonds being financed through the E.U.'s budget. These bonds would be issued for private-sector infrastructure projects, but would be at least partially backed by money from the E.U budget. The German government is expected to push to increase the amount available in an already-agreed-to pilot phase to €1 billion.
Monti had invited the three leaders to Rome ahead of next week's E.U. summit in Brussels, Belgium. The Italian leader said the countries made a positive contribution on Friday in preparing for an effective summit in the E,U, capital next week, where the proposals will be considered by all member states.
For his part, French President Hollande expects important changes in course of managing the euro and debt crisis to emerge at the summit. "The European Council (the powerful E.U. body that represents the member states) must make progress in creating confidence in the euro zone and Europe," Hollande said after the summit. He added that Euro bonds, a means of collectivizing debt across the euro zone that Merkel has thus far rejected, would be a useful instrument, but that further work is required before they can move forward.
Merkel Maintains Opposition To Direct Aid For Banks
Meanwhile, Merkel refused calls for aid to be provided direct from the European bailout funds to banks. The treaties governing the current European Financial Stability Facility (EFSF) and the yet-to-be-implemented permanent European Stability Mechanism (ESM) both stipulate that it is the countries who are partners and not banks, the German chancellor said.
The fund was created with these conditions, Merkel said, adding, in a reference to the Spanish banking crisis, that she did not want to change anything in that respect. "It's not that I don't want to, but the treaties are made that way," she said.
Liability and control belong together, said Merkel, arguing that, in the interests of German taxpayers, the Spanish government had to guarantee that things would ultimately get sorted out. The government could also impose conditions on the banks, she said.
Following a meeting on Thursday of euro-zone finance ministers, Christine Lagarde, the head of the International Monetary Fund (IMF), again called for a "direct link" between the euro rescue fund and the banks, without having to go through national governments. It's a proposal that has also been backed by the European Commission, the E.U.'s executive.
Intellpuke: You can read this Spiegel article in context here: www.spiegel.de/international/europe/germany-france-italy-and-spain-agree-to-growth-pact-a-840495.html