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European crisis deal

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European crisis deal

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A four-way meeting in Rome of the leaders of Germany, France, Italy and Spain has produced a confidence-boosting agreement.

The euro zone’s four biggest economies proposed mobilising one percent of the European Union’s GDP – 130 billion euros – for as yet unspecified measures to try to revive growth.

While they said budgetary discipline will not be ignored, Italian Prime Minister Mario Monti said growth and job creation were prerequisites for fiscal discipline.

French President François Hollande said: “Today we have given a sign of cohesion, coherence, stability and solidarity.”

But the four did not see eye-to-eye on joint bonds to fight the euro zone’s debt crisis.

This comes ahead of a full EU summit next week.

With tact perhaps meant for Prime Minister Mariano Rajoy, Angela Merkel, at the head of Europe’s main contributor to its rescue funds, said she was not singling out Spanish banks when she suggested that governments tighten up oversight at home.

Merkel said: “If I give money to a Spanish bank or another, I can’t tell that bank to change the way it does things, because I don’t have the power. As the German Chancellor I can tell my banks.”

Merkel has argued that members of the 17-nation euro currency union must transfer control over national budget and economic policies to Brussels before Germany would consider common debt issuance.

That plan for a banking union is expected to start by putting the European Central Bank in charge of supervising large cross-border euro zone banks.

Protesters outside the talks showed their real difficulties by symbolically pushing around empty shopping carts.