EURO-ZONE LEADERS early this morning opened the door for the immediate creation of a permanent rescue fund for distressed euro countries and for the European Central Bank to buy government bonds.
At a summit last night, they directed the European Commission to produce proposals this weekend which the governments of the 16 euro-zone countries hope to endorse at an emergency meeting of finance ministers tomorrow.
“The hour of truth has struck for the euro zone,” French president Nicolas Sarkozy said moments after the four-hour meeting broke up.
After a fresh wave of turmoil ripped through global markets yesterday, the euro governments agreed to step up their efforts to fight sovereign debt “contagion” as ECB chief Jean-Claude Trichet and Commission chief Jose Manuel Barroso each warned that the single currency is in the grip of a “systemic problems” due to Greece’s debt crisis.
The leaders said that they “fully support” the ECB in its action to ensure the euro area’s stability.
“Everyone in the euro area is totally supportive of our currency, will defend the currency obviously and we fully support the ECB in what it is doing in that respect,” Taoiseach Brian Cowen told reporters.
