NEWS

Papandreou positive after EU summit

The European Union has taken a decisive step toward making crucial decisions that will affect growth and job creation in the 27-nation bloc, Prime Minister George Papandreou said after an EU leaders? summit in Brussels on Friday.

?The decisions taken at this summit and the upcoming one in March will be decisive in creating the conditions for growth and job creation,? Papandreou said, adding that he was pleased that the EU is moving in this direction

EU leaders discussed strengthening the eurozone?s rescue fund but the talks were dominated by Germany and France?s proposals for a competitiveness pact aimed at winning back market confidence in the bloc’s public finances.

The measures proposed by Paris and Berlin include limits on debt levels being written into national laws, a higher retirement age based on demography, the abolition of wages indexed to inflation, and a minimum corporate tax rate.

“Germany and France will make it very obvious that we intend to defend the euro as a currency… we also want to defend it as a political project,» German Chancellor Angela Merkel told a joint news conference with French President Nicolas Sarkozy just before a presentation to EU leaders.

“We want to send out a clear message, that as the European Union, we intend to grow together. What we want to establish is a pact for competitiveness,» she said.

EU leaders are expected to agree on the details of the plan when they meet in March. They are also due to finalize the structure of the permanent crisis mechanism at next month?s meeting.

The package is to include changes to the European Financial Stability Facility, the 440-billion-euro bailout fund agreed last May, to increase its effective lending capacity and give it more flexibility on how to use its money.

In draft conclusions prepared ahead of the summit, the 27 heads of state and government said they would consider «concrete proposals» for strengthening the EFSF «to ensure the necessary flexibility and financial capacity to provide adequate support,» with those discussions being finalized next month.

EU diplomats told Reuters that no major decisions would be taken on Friday as market pressure on debt of Greece, Ireland, Portugal and Spain has eased.

?Greece has shown that it has the willingness and the ability to carry out major reforms and to make its economy viable,? said Papandreou.