New Eurozone Deal Won't Include UK
David Cameron vetoed a series of financial regulations at EU talks, leaving the 17 eurozone countries to move forward on their own.
| Posted Friday, Dec. 9, 2011, at 11:30 AM ET
European leaders hammered out the new deal outside of the EU framework Photo illustration by Sean Gallup/Getty Images.
After nearly 10 hours of talks in Brussels, European leaders agreed Friday to an intergovernmental pact aimed at enforcing more disciplined budgets in the wake of a debt crisis that has threatened the euro.
But the big news from the agreement, brokered by all 17 countries who use the euro as their currency (the eurozone), is that it will be done outside of the framework of the European Union after British Prime Minister David Cameron refused to sign on.
Cameron balked at joining the deal after a series of exceptions he demanded to safeguard British interests were blocked by France, the Guardian explains. Cameron defended his decision, saying, "What is on offer isn't in Britain's interests so I didn't agree to it."
The agreement and new rules are seen as necessary and urgent as the eurozone economy teeters on the brink of collapse. The crisis started in Greece two years ago, prompting huge bailouts, but with Italy and Spain in a troubled economic state, the crisis has worsened recently and the entire eurozone is now stagnant, if not already in a recession, CBS News and the New York Times explain.
Without some sort of stabilizing plan in place, the commitment of institutions like the European Central Bank to continue to purchase bonds from heavily indebted countries is questionable. ECB’s head Mario Draghi gave a promising response to the new agreement, saying: "It is a very good outcome for euro area members."
To attempt to stabilize the euro by forcing more fiscal and financial discipline, the 17 eurozone countries will hammer out a deal that includes penalties for those countries breaking the new rules. (Overspending countries will face sanctions, for example.) A handful of countries who hope to use the euro as their currency in the future will probably also sign, the BBC reports. The leaders are aiming to have the pact in effect by March of next year.
This was a bad idea from the gitgo. There is no one currency fit all when each country has its own laws and ways of governing. This is a double suck.
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