EU Van Rompuy’s Statement On Mechanism For Future EMU Crises

BRUSSELS (MNI) – European Council President Herman Van Rompuy
Sunday greeted the announcement by Eurozone Finance Ministers of their
agreement on the creation of a new permanent crisis facility, the
European Stability Mechanism (ESM).

The ESM, which will start in mid-2013 after the temporary European
Financial Stability Facility expires, would provide liquidity to
troubled EMU states in exchange for stringent fiscal and economic policy
adjustments.

It also includes a process by which private creditors might have to
face lower interest rates, extended maturities or haircuts on the face
value of bonds issued by states that are determined to be insolvent. But
that process would not affect any bonds purchased before June 2013.

Below is the verbatim text of Van Rompuy’s statement:

“The President of the European Council, Herman Van Rompuy, welcomes
the statement of the Eurogroup on the European stability mechanism.

It follows an agreement between the President of the European
Council, the President of the Commission and the President of the
Eurogroup that, in view of markets developments, it was important to
clarify some issues urgently notably in relation with the role of the
private sector. Our framework will be fully consistent with the IMF
approach.

This agreement, together with the implementation of the measures
proposed by the Task Force on economic governance and endorsed by the
European Council of a month ago, will strengthen the economic governance
and the cohesion of the Euro area.

Herman Van Rompuy will submit in December a text on a limited
Treaty change which will reflect today’s decision by the Eurogroup.”

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