News / Europe

European Leaders Pressed to Deliver at Crisis Summit

European leaders are gathering in Brussels for a critical end-of-year summit, another attempt to resolve a sovereign debt and banking crisis threatening the very future of the euro currency union.  Pressure is on for them to come out with a definitive deal this time around, after what critics claim are months of half-measures.

This is not the first time a European Union summit has been described as the last chance to save the struggling euro currency union.  But the 27 EU leaders gathering Thursday and Friday in Brussels face extraordinary pressure, at home and abroad,to deliver a lasting solution to the two-year-old eurozone crisis.

The plan on the table is authored by Europe's two biggest economies, France and Germany.  They want to overhaul EU treaties to forge a more binding and fiscally responsible eurozone. The two leaders outlined the details of their vision on Wednesday, in a letter to EU President Herman van Rompuy.

Watch related report by Al Pessin:

At a joint press conference with his German counterpart Angela Merkel earlier this week, French President Nicolas Sarkozy said the crisis has given the two countries an extra reason for unity.  He said both countries envision the same kind of Europe.

But their plan must still be accepted by the other 25 EU members or at very least, the 17 members of the eurozone.  And that, says analyst Philippe Moreau Defarges, of the French Institute of International Relations, is not at all certain.

"There will be a very strong pressure to accept this deal.  Not only from the eurozone members, but also outside the eurozone," he said. "I think the British should back this agreement.  But it will be difficult. "

British Prime Minister David Cameron, whose country is not part of the euro currency union, has already expressed reservations.  He told British TV his first priority at the summit will be to defend British interests.

"Eurozone countries do need to come together, do need to do more things together.  If they choose to use the European treaty to do that, Britain will be insisting on some safeguards too.  And as long as we get those, then that treaty can go ahead," said Cameron. "If we cannot get those, it will not."

BNP Parisbas bank economist Shahin Vallee, a visiting fellow at Brussels economic think-tank Bruegel, does not think any deal reached will be enough.

"I think not, unfortunately.  I think this proposal rests on the idea that with stronger fiscal rules and more automaticity of those rules the euro area will be stronger and financial markets will be comforted and have more belief in the long term sustainability of the euro area, and I think this is an illusion," said Vallee.

French analyst Moreau Defarges also has his doubts about the French-German plan.

"It is a very partial, a very institutional, a very budgetary and fiscal answer to the euro crisis.  The euro crisis is a growth crisis, a problem of growth," said Defarges. "Will the European Union find a new path toward growth?  That is the key question."

Even if the other EU countries accept the French-German plan, it will take months, if not years, to fully implement it, because it may require amending EU treaties.  Analysts like Vallee say Europe's crisis needs immediate action.

"I think the right solution  would be to have a more ambitious treaty change, take the necessary time to negotiate the provisions of this new treaty, while at the same time doing something that is immediately operational to respond to the crisis and the urgency of the crisis," noted Vallee.

Adding to the pressure, ratings agency Standard & Poor's has threatened to downgrade the credit rating of 15 eurozone members, including heavyweights France and Germany.  There are fears the crisis could spread overseas, slowing growth in Africa and Asia and threatening America's fragile recovery.

U.S. Treasury Secretary Timothy Geithner has been meeting with top officials and heads of state in Europe this week, underscoring Washington's concern.

"I am here in Europe, of course, to emphasize how important it is to the United States, and to the world economy as a whole, that Germany and France succeed alongside the other nations of Europe in building a stronger Europe," said Geithner.

The eurozone crisis has rekindled longstanding debates on whether the European Union should head toward more unity, economically and politically or does the crisis underscore the failure of European integration?  Vallee believes resolving these and other EU visions is also critical to resolving the eurozone crisis.

You May Like

UN Ambassador Power Highlights Plight of Women Prisoners

She launches the 'Free the 20' campaign, aimed at profiling women being deprived of their freedom around the world More

Satellite Launch Sparks Spectacular Light Show

A slight delay in a satellite launch lit up the Florida sky early this morning More

Fleeing IS Killings in Syria, Family Reaches Bavaria

Exhausted, scared and under-nourished, Khalil and Maha's tale mirrors those of thousands of refugees from war-torn countries who have left their homes in the hopes of finding a better life More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs