Van Rompuy: EU introduces ‘peer pressure’ to push economic reforms

Eurozone leaders late on Friday gave in to fresh demands from Brussels and Germany to sign up to a competitiveness pact that will prompt countries to further coordinate their economic policies, as a quid pro quo to increase German-backed bailouts to rescue debt-laden countries. After marathon talks on the Libya crisis, late last night eurozone leaders committed to a watered down set of demands to appease German angst over bailouts and clear the way for an agreement to increase the EU’s rescue facility to 440bn euros from its current level of around 250 billion. EU leaders agreed they would increase the guarantees they provide to the bailout fund to allow it to raise capital on international markets. This should ensure that the fund is capable of bailing out any eurozone states beyond Greece and Ireland that require assistance, with Portugal seen as the country next most likely to need financial help. Spain may follow after that. www.euractiv.com