Van Rompuy Advises Against New EU Treaty

Herman Van Rompuy will preside over the European Union summit on Thursday and Friday, which is intended to deliver a convincing agreement on how to solve the region's debt crisis. Photo by EPA/BGNES

European Council President Herman Van Rompuy will push for adopting tighter rules to tackle the eorozone debt crisis without changing EU treaties, a leaked report for the upcoming crucial EU summit has revealed.

According to Van Rompuy this would speed up the implementation of reforms and steer clear of any potential political complications.

In the interim report, details of which have been obtained by BBC, Van Rompuy proposes a plan aimed at agreeing a "new fiscal compact" without holding a referendum or ratification by the parliaments of each eurozone country.

The draft says that tougher fiscal reforms can be adopted simply by amending a protocol - a procedure that needs national consensus but does not require substantial changes to the EU treaties.

The interim report contains the following key provisions, as cited by BBC:

- Each eurozone member's budget deficit should be below 3% of GDP and national debt under 60%

- A "golden rule" should be enshrined into national legislation to guarantee a balanced budget in the medium-term

- The eurozone bailout fund to be given a banking licence to borrow directly from the European Central Bank

- The European Commission to have the power to impose austerity measures automatically on countries which require bailouts

The European Union summit on Thursday and Friday, which will be presided over by Herman Van Rompuy, is intended to deliver a convincing agreement on how to solve the region's debt crisis.

Earlier this week French President Nicolas Sarkozy and German Chancellor Angela Merkel proposed that a new EU treaty is adopted to tackle the crisis.

The move however was overshadowed by Standard & Poor's decision to put all eurozone nations on credit watch "with negative implications".

The ratings agency said the move was prompted "by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole".

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