key points from the summit:
• 25 countries endorsed the fiscal pact. They agreed to enshrine balanced budget legislation into their national law, with annual structural deficits capped at 0.5% of GDP. Transgressors face penalties of 0.1% of GDP, with fines being added to Europe’s bailout fund, the European Stability Mechanism (ESM). The UK and the Czech Republic declined to sign.
The new Treaty on Stability, Coordination and Governance (SCG) will come into force once it has been passed by the parliaments of at least 12 countries that use the euro.
• Euro area leaders confirmed that they will reassess whether the ESM, and its forerunner the European Financial Stability Facility (EFSF), have sufficient resource. They still plan to bring the ESM into force in July 2012.
• EU leaders agreed to a new drive to stimulate growth and create employment across the region, particularly for young people. Unused development funds will be used to create jobs. They also vowed to help small and medium enterprises to get access to credit, and to use the Single Market as a key driver for Europe’s economic growth.
• Leaders also opposed the suggestion that a ‘commissioner’ should be installed in Greece to ovesee its budget decisions. French president Nicolas Sarkozy warned that this would be undemocratic, as “the recovery process in Greece can only be enacted by the Greeks themselves.”