EU will prop up failing banks
After tough all-night bargaining, European leaders appear to be set to funnel monies to struggling banks after a summit in Brussels.
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Germany had yielded a bit on its insistence on forcing tough reforms in exchange for rescue money. That was a victory for Italy and Spain, who have argued they have done a lot to clean up their economies but are facing rising borrowing costs.
Fox reports that Spain’s Prime Minister Mariano Rajoy hailed an accord Friday that allows the euro countries to bail out banks directly rather than via debt-laden governments as a road map toward shoring up the 17-nation eurozone after more than two years of crisis.
The agreements early on Friday at a European Union summit in Brussels suggested German Chancellor Angela Merkel said after the meetings broke up soon before dawn that she was “very satisfied that we took good decisions on growth.”
The bank decision was aimed at helping Spain, which sought a €100bn ($126bn) rescue to help its troubled banks. European Council President Herman Van Rompuy called it a “breakthrough that banks can be recapitalized directly.”
Van Rompuy said leaders of the 17-nation eurozone also agreed to a joint banking supervisory body. And he said the leaders of the full 27-member European Union agreed to a general long-term plan for a tighter budgetary and political union.
