BRUSSELS (Reuters) – Chancellor Angela Merkel cemented her political ascendancy in Europe Monday when 25 out of 27 EU states agreed to a German-inspired pact for stricter budget discipline, even as they struggled to rekindle growth from the ashes of austerity.
Only Britain and the Czech Republic refused to sign a fiscal compact in March that will impose quasi-automatic sanctions on countries that breach European Union budget deficit limits and will enshrine balanced budget rules in national law.
The accord was eagerly greeted by the European Central Bank which has long pressed euro zone governments to put their houses in order.
“It is the first step toward a fiscal union. It certainly will strengthen confidence in the euro area,” ECB President Mario Draghi said.
Officially, the half-day summit focused on a strategy to revive growth and create jobs at a time when governments across Europe are having to cut public spending and raise taxes to tackle mountains of debt.