FT - European leaders agreed on Thursday night to take up a narrow, limited change in the European Union's treaties to shore up the stability of the euro, but stopped short of giving Angela Merkel, the German chancellor, the more sweeping changes to the bloc's treaties she had called for.
After a summit meeting that stretched into the early morning hours, Herman Van Rompuy, the EU's permanent president, said that he had been tasked with coming up with an amendment to create a new, permanent bail-out system intended to rescue any future Greek-like collapses. The amendment would be presented in December.
"In order to have the permanent crisis mechanism, we need to have a limited change, a limited amendment to the treaty," Mr Van Rompuy said at a news conference.
Ms Merkel had put treaty change at the top of the summit's agenda, insisting the treaties had to be reopened to create the new rescue mechanism and to allow for the EU to strip voting rights from member states who persistently failed to bring their debt levels down to EU norms.
The proposal for suspending voting rights was widely objected to, including by Jose Manuel Barroso, president of the European Commission, who labelled the proposal "unacceptable."
"If treaty change is to reduce the rights of member states on voting, I find it unacceptable and, frankly speaking, it is not realistic," Mr Barroso said at a news conference, a stance he repeated inside the summit meeting. "It is incompatible with the idea of limited treaty change and it will never be accepted by the unanimity of member states."
At the summit, leaders essentially pushed any decision on voting rights down the road, saying Mr Van Rompuy should examine the subject at an unspecified later date.
But Ms Merkel was able to claw back a limited agreement on the bail-out system. In the end, the official statement from the summit's leaders was short on specifics. It said Mr Van Rompuy should "undertake consultations" with member states on "a limited treaty change" and report back in December.
In addition, the European Commission, the EU's executive branch, was instructed to come up with specific proposals for the new mechanism.
During the summit, European leaders said they were backing Germany's move on treaty change only reluctantly, and only after full-scale arm twisting by Ms Merkel. And even then, most officials said they would only support limited amendments -- perhaps as little as a sentence or two added to the treaties. The treaty's clause barring bail-outs would not be changed, officials said, but another measure allowing for the EU to take emergency measures in times of crisis was likely to be widened to make room for the fiscal rescue system.
Mr Van Rompuy reflected the ambivalence of the member states towards the German position, which was backed by France, acknowledging that there were fiscal and political perils for many countries when the treaties are reopened. He vowed to keep the changes so narrow that special expedited procedures could be used to make the changes.
"We're not talking about opening up the whole treaty of Lisbon," he said. "There are legal arguments and political considerations -- both for individual member states and the union as a whole."
Despite widespread hesitance, Mr Van Rompuy said the members were eventually persuaded by the risk that having the permanent rescue system created outside the treaties could open it to legal challenge in national courts. German officials have long warned that their constitutional court could rule such a mechanism illegal.
