EU Leaders Agree on Permanent Rescue Fund for Eurozone

President of the European Council, Belgian Herman Van Rompuy (R), and European Commission President Jose Manuel Barroso (L). Photo by EPA/BGNES

EU leaders have agreed on setting up a permanent mechanism to rescue EU member states from debt crises that threaten the 16-nation eurozone, the BBC informed.

The eurozone stability mechanism required a change in the EU's Lisbon Treaty and it has already been agreed.

EU President Herman Van Rompuy said that leaders were ready to do "whatever is required" to protect the currency.

So far, Greece and the Irish Republic have received emergency bail-out funds.

The 27 EU leader agreed late Thursday that in 2013 the permanent mechanism would replace the eurozone's EUR 750 B temporary bail-out fund, the European Financial Stability Facility (EFSF).

"We stand ready to do whatever is required to ensure the financial stability of the eurozone as a whole," Van Rompuy said at a news conference.

The European Commission President, Jose Manuel Barroso, has stated that it was "a big day for Europe" and that leaders should now put their words into action.

"Our task now is to hold a course – walk, not talk – and prove those wrong who predicted the demise of our common currency," Barroso said.

The amendment to the Lisbon Treaty says that "member states whose currency is the euro may establish a stability mechanism, to be activated if indispensable to safeguard the stability of the euro as a whole."

However, the countries which require the emergency aid must act to tackle their debt or deficit, the statement adds.

"The granting of any required financial assistance under the mechanism will be made subject to strict conditionality," the text says.

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