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EU leaders agree on crisis-solving steps

Friday, June 29, 2012 - 02:34

Jun.29 - Euro zone leaders go home from a crucial summit after bolstering their crisis-fighting powers but analysts say differences between them remain. Joanna Partridge reports from Brussels

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They met divided - and under pressure to save the euro from disaster. European leaders departed Brussels slightly more united in their plans to tackle the euro zone crisis - and having delivered some surprises. They agreed on emergency action to help Italy and Spain bring down their borrowing costs. Key to this will be allowing their rescue fund to inject aid directly into struggling banks from next year and intervene on bond markets. They also said they would create a single body to supervise euro zone banks - based around the ECB - in what's seen as a landmark step towards a European banking union. ECB President Mario Draghi welcomed this, but said any loans to banks will come with conditions attached. SOUNDBITE: EUROPEAN CENTRAL BANK PRESIDENT MARIO DRAGHI SAYING (English): "Of course both these things have to be accompanied by strict conditionality otherwise they're not credible and they will not achieve results for which they're being created." Many saw the bank loan deal as a political victory for the Italian and Spanish leaders over Germany's Angela Merkel. French President Francois Hollande insisted it was a joint effort. SOUNDBITE: FRENCH PRESIDENT FRANCOIS HOLLANDE SAYING (French): "I'm quite concerned by the fact some people are crying victory and others might feel like they have to justify any sort of defeat. What happened was a compromise, it evolved. And Mrs Merkel, just like others, participated in seeking it, and in the desire to help and consolidate the euro zone." Despite the compromise, differences remain and Merkel once again made clear she would not support euro bonds. SOUNDBITE: GERMAN CHANCELLOR ANGELA MERKEL SAYING (German): "Concerning this report we spoke from different positions, and my position on this question has not changed." PTC: As the European leaders go home from this Brussels summit, many may well be leaving feeling quite satisfied with how things progressed. For once it does appear to be the case that they achieved more than many had hoped at the outset. But Pieter Cleppe from Open Europe believes the leaders have only made limited progress. SOUNDBITE: Pieter Cleppe, Head of Brussels Office of Open Europe, saying (English): "It's again a very short-term perspective that this gives. It allows them to kick the can down the road on the very short-term, so it's not a sustainable solution for the euro zone's problems." The politicians have once again bought themselves some time - and Spain and Italy some breathing space. Chances are they'll be holding another meeting like this, in just a few weeks' time. Joanna Partridge, Reuters