By James G. Neuger and Stephanie Bodoni - Dec 9, 2011 8:30 AM GMT+0400
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.
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