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EU leaders gather for cure for crisis

12-15-2010 13:47 BJT

European Union leaders will meet on Thursday and Friday to approve changes in the EU treaty, expected to pave the way for a permanent mechanism for handling future financial and debt crises after 2013. They will also discuss ways to prevent the euro area's debt crisis escalating.

It all started in Greece. And fears that the debt crisis could spread throughout Europe followed.

Last May, the EU and the IMF agreed to a 110 billion bailout for the debt-stricken Greece to help their economy avoid a complete sovereign default that could shake all of Europe.

In exchange, Athens committed itself to years of painful cutbacks.

Next, it was Ireland.

In the wake of the two crises, European leaders agreed a permanent system to resolve Europe's debt crisis was needed.

EU leaders will consider a minor change to the Lisbon treaty at a summit in Brussels on Thursday and Friday.

Herman Van Rompuy, European Council President said "We agreed to set up a permanent financial stability mechanism for after 2013, and the Eurogroup has already agreed upon key features. I expect the European Council next week to decide on a very limited treaty change to this end."

By agreeing to a minor change, EU leaders hope it will not be subject to a referendum in Ireland and Britain.

Analysts say certainties and long term solutions are needed.

Carsten Brzeski, Ing Analst said "It would be great for them to think ahead at least two steps, not just one. If they manage to do so I think they can rebuild trust in politics."

Other countries under scrutiny include Portugal, Spain, Italy or Belgium.

In Portugal, public finances need consolidation.

Spain has a better budget and debt positions, but high unemployment and the collapse of a property bubble is keeping its banking sector in possible need of emergency aid.

Citigroup says the EU will issue the region 800 billion euros of debt next year.

Many EU governments have put budget programs in place. From Greece to Ireland, European citizens are protesting against pension and labor reforms.

Editor:Xiong Qu |Source: CNTV.CN

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