A new fiscal treaty with stricter budget rules will be in place by mid-2012, according to the European Council’s president.
Herman Van Rompuy says the first draft may even be ready by next week: “I’m optimistic because I know it’s going to be close to 27. In fact 26 leaders indicated their interest in these efforts. They recognised the euro is a common good. Then by early March at the latest, this fiscal compact treaty will be signed. The aim is for the ESM treaty to be ratified by mid 2012.”
The devil may yet emerge from the details of the treaty but the 17 eurozone members are nonetheless committed. Nine others will seek parliamentary approval while Britain has ruled out any deeper fiscal integration.
Britain’s Prime Minister David Cameron refused to sign up after he was unable to win special treatment for London’s financial services industry, which accounts for 10 percent of the country’s GDP.
Despite last week’s agreement in Brussels, the response from the markets has been lukewarm with some investors disappointed the European Central Bank has not taken more steps to tackle euro zone debt.