BRUSSELS, Jan 30 (Reuters) – European leaders agreed
on a permanent rescue fund for the euro zone on Monday and 25
out of 27 EU states backed a German-inspired pact for stricter
budget discipline, but they struggled to reconcile fiscal
austerity with economic growth.
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
pledging to enact balanced budget rules in national law.
Officially, the half-day summit focused mainly 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.
But differences over the limits of austerity, and Greece’s
unfinished debt restructuring negotiations, hampered efforts to
send a more optimistic message that Europe is getting on top of
its debt crisis.
French President Nicolas Sarkozy told a news conference he
expected a final agreement on reducing Greece’s debt to private
bondholders “in the next few days” and believed that European
institutions – a clear reference to the European Central Bank -
would decide independently to help meet a funding gap.