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BRUSSELS 13-14 Dec 2012 EU leaders meet — with deadlines

European Union leaders face several deadlines in December, the end of the Cyprus EU presidency. They must sign off on the Multiannual Financi

December 13, 2012 - NULL

BRUSSELS 13-14 Dec 2012 EU leaders meet -- with deadlines

European Union leaders face several deadlines in December, the end of the Cyprus EU presidency. They must sign off on the Multiannual Financial Framework (MFF), the 2014-2020 budget; and agree on mechanisms for bailing out members with too much debt and not enough growth, and on ways to mend the ailing euro currency. An agreement to adopt a legal framework that gives the European Central Bank overall responsibility is supposed to happen at the meeting, but a sticking point is the question of representation by non-euro zone banks that decide

BRUSSELS 13-14 Dec 2012 EU leaders meet -- with deadlines

European Union leaders face several deadlines in December, the end of the Cyprus EU presidency. They must sign off on the Multiannual Financial Framework (MFF), the 2014-2020 budget; and agree on mechanisms for bailing out members with too much debt and not enough growth, and on ways to mend the ailing euro currency. An agreement to adopt a legal framework that gives the European Central Bank overall responsibility is supposed to happen at the meeting, but a sticking point is the question of representation by non-euro zone banks that decide to join the scheme. EU enlargement will be one of the easier matters: the bloc is more or less agreed on EU candidate countries, and could sign off on the list at the summit. The foreign concerns for the summit include the Syrian civil war and Iran.

European Union leaders meet ahead of the December summit to bring the MFF closer to completion. They agree that the long-term budget must contribute to growth, investment and jobs, but disagree on the details. Several members want it to be bigger. Britain and Germany are among the members that vow to oppose it if they see an increase. Non-euro zone countries don't want a link between the MFF and measures to ease the crisis in the currency union. The European Parliament is co-legislator on budgetary matters, so it also has to approve the MFF. The deadline is the December summit.

Bailouts are snagging on disagreement about how and when the funds will be delivered to EU member countries - particularly in Spain and Greece -- and bank recapitalization. According to the New York Times, EU leaders agreed on Oct 19 that legislation enabling rescue aid to be channeled directly to Spanish banks should be agreed by the end of the year, but they left open critical decisions on how soon it could go into effect. The debate about Greek banks runs along the same lines.

Meetings to tackle the three-year-old debt crisis in the 17-nation euro currency area led to an agreement to establish a single banking supervisor from 2013. The details of the responsibilities of the supervisor remain to be worked out at or by the December summit.

Reuters notes that Germany opposed to a joint deposit guarantee, which the International Monetary Fund and many economists consider a key component of a banking union to deter capital flight.

The candidates' club includes: Turkey; Macedonia; Montenegro; Iceland and Serbia. Croatia, which will be admitted as the 28TH member in July. (WRITTEN OCT 2012)

RELATED READING:

France picks up fight on 'own resources' for EU budget (Euractiv 11 Oct 2012)
http://www.euractiv.com/priorities/france-picks-fight-resources-eu-news-514152

Special November summit to focus on long-term EU budget (Euractiv 3 Sep 2012)
http://www.euractiv.com/specialreport-budget/november-summit-focus-long-term-news-514540

Leaders Say They Expect Agreement on Aid for Spanish Banks This Year (NYT 18 Oct 2012)
http://www.nytimes.com/2012/10/19/business/global/at-the-eu-summit-a-focus-on-cohesion.html?pagewanted=all&;_r=0

Merkel raises new hurdles on EU bank union (Reuters 19 Oct 2012)
http://www.reuters.com/article/2012/10/19/us-eu-summit-idUSBRE89H0IZ20121019

Keywords: European Union summit, December 2012, EU summit, EU December summit, Multiannual Financial Framework, MFF, 2014-2020 budget, banking supervisor, euro zone, currency union, bailouts, debt, euro crisis, euro zone crisis, Spain, Greece, Brussels, European Union, Europe

Date written/update: 2012-12-13