By DPA,
Brussels: Eurozone leaders called for the instant creation of a permanent rescue system for members who fall into the kind of financial turmoil currently afflicting Greece, on a night of high drama in Brussels early Saturday.
The euro has no rules that would allow the rescue of ailing members because its existing rules are meant to make it unnecessary. But last week the group was forced to approve a record 110-billion-euro ($140 billion) bail-out for Greece.
The bail-out was not enough to calm markets as traders feared that Spain and Portugal might follow Greece’s example. The euro slumped to a 14-month low this week.
“Taking into account the exceptional circumstances, the European Commission will propose a European stabilization mechanism to preserve financial stability in Europe,” the president of the EU, Herman Van Rompuy, read from a joint declaration by leaders.
In a sign of the extreme urgency of the situation, the commission will present its plans on Sunday morning, and the finance ministers of the EU’s 27 member states are set to take a decision on them the same afternoon, Van Rompuy said.
That is an unprecedented move in the EU, where member states usually take months to decide on such weighty issues.
“All the heads of state and government of the euro area are fully aware that we face a serious situation in the eurozone. It’s about responsibility and it’s about solidarity: we will face this situation together,” Van Rompuy said.
While the proposals would cover the eurozone, they would require the approval of all 27 EU member states to be put into action.
No details of the proposals were available, but diplomats said that options included setting up rules to activate loans from member states quickly, and allowing the commission to borrow on world markets so that it could fund individual states – something the EU executive can already do for non-euro countries.