The president of the European Council, Herman Van Rompuy, has said that the fiscal agreement reached at last week's summit in Brussels will be finalised by March 2012 "at the latest".
Speaking this morning in front of the European Parliament in Strasbourg, Mr Van Rompuy described last week's summit as a moment of responsibility and solidarity by the European community.
At the summit in Brussels, 23 countries agreed on stricter financial rules, labelled as a "fiscal compact" while three others agreed to send the deal before their respective national parliaments.
Any hopes of a unanimous agreement were dashed by the United Kingdom as prime minister David Cameron vetoed a new treaty for the 27-member EU after his demand for special protection of Britain's financial services industry was denied.
Mr Van Rompuy's comments come after Taioseach Enda Kenny yesterday said no decision would be made before March on whether or not a referendum relating to proposed EU treaty changes would be required here.
The Taoiseach met with leaders of the Opposition parties to brief them on the outcome of the European summit at Government Buildings earlier today.
Following Mr Van Rompuy this morning, the president of the European Commission, Manuel Barrosso said that the greater financial discipline provided by the fiscal compact was indispensable.
He added that greater discipline would not rebuild the European economy alone and that EU institutions now needed to go further to promote jobs and growth.
Mr Barrosso said that Mr Cameron's demands could not be accommodated as they would have risked compromising the integrity of the internal market.
Mr Barrosso praised the results from last week's summit. He said that the greatest risk prior to the meeting in Brussels was a split between the 17 euro countries and the other ten. Instead of being a "17 plus" agreement, it was a "27 minus", he said, adding that there was broad agreement.
He also reassured the European Parliament that the fiscal compact would not replace European institutions in the decision making process.
The sell-off in European stocks and the euro eased today but concerns the region remains a long way from solving its sovereign debt crisis was seen likely to keep the pressure on.
The main European stock index, the FTSEurofirst 300 index of top shares was up 0.3 percent at 969.73 points after falling 1.9 per cent yesterday in reaction to concerns last week's EU summit failed to ease the debt crisis in the short term. In London the FTSE 100 was up 0.65 per cent while in Germany and France the Dax and the CAC 40 were up 0.81 per cent and 0.38 per cent respectively.
Banking stocks could return to centre stage on equity markets after sources familiar with the matter said the German lender Commerzbank and the government have been in talks for several days over possible state aid.
While Commerzbank, 25 per cent owned by Germany, wants to avoid state aid, it needs to find €5.3 billion capital by mid-2012 to meet European Banking Authority capital rules.
German Bunds were broadly flat as the debt markets worried over the risk of sovereign credit rating downgrades across the euro zone.
Speaking yesterday, French president Nicolas Sarkozy said Britain's decision to veto a new EU treaty has created "two Europes" and marks a major step towards integration within a smaller block.
Outlining what France sees as the far-reaching implications of the “fiscal compact” agreed in Brussels, Mr Sarkozy hailed “the birth of a different Europe” that would converge without the British.
French claims of a decisive split came as British prime minister David Cameron rejected the idea of a two-tier Europe and insisted the UK would remain fully engaged on the issues that concerned it most.
Amid Irish concern that London could be isolated by its stance and debate across Europe over its future relationship with the EU, Mr Cameron insisted Britain would remain a “full, committed and influential” EU member.
Additional reporting: Reuters
