European leaders met in Brussels on Thursday for the first day of a summit aimed at tackling the debt crisis. The meeting was dominated by the Portuguese rejection of an austerity budget, which led to the Prime Minister’s resignation on Wednesday, and a fall in the country’s credit rating.
The summit also provided a chance to reinforce an EU response to Libya now that NATO is involved, with French President Nicholas Sarkozy stressing that political coordination is still necessary. EU members agreed to adopt more sanctions against Libya, stopping oil and gas revenue from reaching leader, Muammar Gaddafi.
While it was unclear at the summit whether NATO or the coalition would eventually lead the military operation in Libya, there has been progress on the issue by the EU.
However, there was little success in dealing with the issue of debt. A block by Finland means there’ll be no final decision on a stability fund until June. With elections due in April, Finnish domestic politics have proved to be a stumbling block to fast action. The populist, anti-EU True Finns party is gaining strength in the polls, making the government there cautious about contribution to the bail-out fund.