Union leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013

Union leaders agreed to amend the treaties of the block to create a permanent mechanism of the debt crisis in 2013, as it struggled to overcome divisions on immediate measures to stabilize the bond market.

One day after the European Central Bank is armed with more capital to withstand the crisis, the EU began to discuss measures such as offering short-term loans or the use of funds from the main block of bailout to buy bonds of countries difficulties.

"My vision is of a Europe growing closer - - at different speeds in some cases, to be sure," said German Chancellor Angela Merkel told reporters after an EU summit in Brussels.

For now, Germany ruled the filling of the present 750 billion euros ($ 1 billion) of emergency funds or aid by land to Portugal or Spain, which reinforces skepticism about the search market in Europe by the correct formula to quell the fiscal contagion that threatens the euro.

Shaping the future "is to some extent, a facade, and that does not solve the current crisis," said Carsten Brzeski, economist at ING Group NV in Brussels. "The European leaders did not address the issue of debt sustainability and the potential problems of insolvency by 2013."

The euro gained 0.1 percent to $ 1.3254 at 2:45 pm in Brussels, while bonds of Portugal, Spain, Greece and Ireland have slipped. Moody's Investors Service follow-up warnings that may cut the credit rating of Spain and Greece, announce today that Ireland downgraded five notches to Baa1 from Aa2 with negative outlook.

Ongoing negotiations

Luxembourg Prime Minister Jean-Claude Juncker, said the ongoing discussions on a more flexible use of the main components 440 million fund instead of waiting until the last minute to fix all lines of life-or-nothing do with the package of 85 billion euros granted to Ireland on 28 November.

Asked whether the short-term loans or bond purchases are being debated, Juncker said the measures being considered are "exactly what you mentioned."

These measures to ease tensions at the ECB, which has bought € 72000000000 debt weaker countries "since May stabilize markets. Yesterday, the ECB shore up its capital base to protect against loss of purchasing, voting nearly double its capital to 10.76 million euros.

"Let's be honest," said International Monetary Fund Dominique Strauss-Kahn in an interview with Charlie Rose of PBS. "The European Union needs a little more time, until perhaps early next year to be able to produce a complete package."

No "speculation"

Powered by a public outcry in Germany against fiscally irresponsible to shore countries, Merkel was opposed to put more money on the table or more intertwined European economies through the joint sale of bonds. Merkel did not rule out the more flexible use of current background, refusing to enter the "speculation."

In a departure from the German insistence that each country to determine their own destiny, Merkel said Tuesday that national fiscal discipline will not only the region of the 16-nation euro on a stronger footing.

Merkel and French President Nicolas Sarkozy said that a closer coordination of tax rates to businesses could return to the agenda as Europe seeks to forge a more unified and correct defects in the makeup of the euro.

In a blow to 12.5 percent of Ireland rate of corporation tax, Sarkozy said: "I do not think you can have the lowest corporation tax in the euro area and then transfer your debt." Said Spanish Prime Minister Jose Luis Rodríguez Zapatero, the tax debate is an "important development" that will play over the years.

"Need more '

The Italian Prime Minister Silvio Berlusconi, put calls for borrowing euro area as a whole in the same category, taking note of the German opposition, but that the proposal has to mature. Be studied further. "

The main business of the summit, Germany won an EU commitment to a treaty amendment to establish a system of crisis resolution in 2013 that would allow financial assistance "if necessary" to prop up the euro and could force to bondholders to bear some of the costs of future bailouts.

German insistence on the reduction of bond values when countries have problems in the future triggered the latest phase of the debt crisis, which culminated in Ireland support package and causing concern that Portugal and Spain will be next .

While the costs to bondholders are not mentioned in the two-sentence amendment agreed yesterday evening, the leaders adopted a decision on 28 November by the finance ministers that the depreciation was performed on a "case by case "according to the practices of the IMF.

"Clarification useful"

ECB President Jean-Claude Trichet, called for a commitment not to the bond amortization term a "useful clarification."

Merkel necessary amendment to avoid German high court that the mechanism of future aid, the EU wants to start when the current is extinguished rescue package in mid-2013.

The compromise text states: "Member States whose currency is the euro will establish a stable mechanism to be activated if necessary to safeguard the stability of the euro area as a whole. The granting of any need for financial assistance under mechanism shall be subject to strict conditions. "

Merkel did not get everything he wanted. Germany originally pushed to allow financial aid only as a "last resort", a language that could have dismissed the contingency credit lines, or because the IMF the lead in the ranking of Europe's economic problems.

Last reviewed a year ago, the treaty is the EU equivalent of a constitution, binding on EU institutions in Brussels and in the management of national governments in European affairs. The 27 countries, including 11 outside the euro region, must ratify the amendment.

European finance ministers plan to work out the details of the future system of March for it to come into force in the middle of 2013.