By
James G. Neuger and Stephanie Bodoni
-
Dec 9, 2011 8:30 AM GMT+0400
European Central Bank President
Mario Draghi cut interest rates and offered banks unlimited cash for
three years while steering clear of any signal the ECB will buy more
bonds to stem the region’s debt crisis.
Mario Draghi, president of the European Central Bank.
Photographer: Hannelore
Foerster/Bloomberg
European leaders stepped up the fight
against the debt crisis, channeling as much as 200 billion euros
($267 billion) to the International Monetary Fund and bowing to
European Central Bank demands for a tightening of anti-deficit
rules.
In an accord hailed by ECB President Mario Draghi, the
leaders also laid out a new “fiscal compact” to prevent future
debt runups and accelerated the startup of a planned permanent
500 billion-euro rescue fund.
“It’s a very good outcome for euro-area members and it’s
going to be the basis for a good fiscal compact and more
disciplined economic policy in euro-area countries,” Draghi
told reporters after 12 hours of overnight talks in Brussels.
European leaders navigated a labyrinth of political, legal
and economic constraints amid unrelenting pressure from
financial markets to craft the new approach to fighting the two-
year-old crisis, which now threatens to engulf Italy and Spain.
At the same time, the leaders ventured into untested legal
territory by plotting to anchor the tougher budget rules in a
separate euro-area treaty after Britain and Hungary balked at
amending the existing treaty covering all 27 EU countries.
To contact the reporters on this story:
James G. Neuger in Brussels at
jneuger@bloomberg.net;
Stephanie Bodoni in Brussels at
To contact the editor responsible for this story:
James Hertling at jhertling@bloomberg.net
