European Leaders Take Partial Step Toward Stabilization
October 19, 2012
European leaders took an important step - though only a partial one - toward stabilizing their economies at a summit Thursday night. They are making difficult changes that could have impact on the continent and the world.
European leaders gathered in Brussels from all parts of the region and nearly as many points of view. In the end, they agreed to move toward tighter control of banks in countries that use the euro, what is known as "banking union."
"The urgent element now is setting up a single supervisory mechanism to prevent banking risks and cross-border contagion from emerging, and that's why the European Council called tonight for swift progress," said EU Council president Herman van Rompuy.
But not swift enough for some, who wanted a firm date for implementing the plan early next year.
Calls for 'Fiscal Union'
And some experts say even full banking union would not be enough to stop the downslide in troubled European economies and to prevent such crises in the future. Among them is Guntram Wolff, deputy director of the Bruegel European think tank.
"The real discussion we need to have now is about not just the banking union, but also about the fiscal resources that are needed at the euro zone level," said Wolff.
That means what is called "fiscal union" - a budget funded by euro countries to prop up troubled banks and governments as needed. And that will take still more time to negotiate.
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