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EU agreement on debt crisis expected Wednesday

Xinhua, October 24, 2011

• European Union (EU) leaders expressed confidence on Sunday that an agreement on a comprehensive package to deal with the debt crisis can be achieved on Wednesday, while the European Council summit also stressed the importance of boosting growth.

  CONFIDENT OF AGREEMENT

  "We are working in a spirit of compromise and a spirit of making an ambitious comprehensive plan. And we are confident that we will get an agreement on Wednesday," European Council President Herman Van Rompuy told a press conference in Brussels following the EU summit.

  Van Rompuy played down the Franco-Germany divisions, saying "I saw a French president and a German chancellor determined to work together, and together with the other eurozone members, to solve the debt crisis."

  Speaking at a joint press conference after the meeting, German and French leaders said that key decisions would be adopted to calm down market on Wednesday when another eurozone summit is expected to be held.

  German Chancellor Angela Merkel said "We are preparing for the meeting on Wednesday. No decisions will be taken today. They will be adopted on Wednesday."

  Echoing Merkel, French President Nicolas Sarkozy said "By Wednesday we'll reach an agreement that will calm down the markets."

  In the meantime, Merkel hinted that more steps would be necessary after the Wednesday meeting.

  "Wednesday will not be the last step. There are a number of individual steps we have to go through. Bank recapitalization alone doesn's make sense without a proper plan for Greece," said the German chancellor.

  On banks' recapitalization, Merkel held that the costs would be borne by banks themselves, "if not, by the state and, as the last resort, the instrument will step in."

  In an indication of the "determination to work together," Sarkozy said, facing the crisis, "it is critical that France and Germany remain close together and speak with the same voice and the same volume."

  FOCUS ON GROWTH

  While no substantial results have been made to solve the debt crisis, the EU countries have reached agreement on boosting long-term growth.

  A large portion of the conclusions released after the summit of the EU leaders is devoted to growth-enhancing measures, which include exploiting the single market, reducing administrative burden and reducing the overall regulatory burden, among others.

  "The immediate economic challenges are serious: pressure on banks and on sovereign bonds, slowing economic growth, rising unemployment," Van Rompuy told the press conference.

  The EU focused on how to boost growth, because stimulating growth is essential for the EU to "regain safe ground."

  "A perspective of sustained economic growth can bring back confidence, create jobs and absorb debts," Van Rompuy said.

  He identified the Single Market as the best tool to boost growth and said much more can be achieved by further integrating the European market.

  "We decided to accelerate those measures in the Single Market which will create jobs and growth in the short to medium term. For instance by making it easier for small and medium size enterprises to get credit and to hire employees," the European Council president told reporters.

  Echoing Van Rompuy, European Commission President Jose Manuel Barroso said earlier on Sunday at the European Council meeting that completing the Single Market would significantly boost growth, and "Relevant reforms would add around three percent to the GDP level in 2020."

  Van Rompuy also stressed the importance of promoting trade and investment ties with non-EU countries. "Europe's trade and investment relations with our international partners are another element of growth. Today we discussed how to use these relations more strategically."

  Barroso's presentation showed that about a quarter of Europe's growth in 2010 came from trade with partners outside the EU. By 2015, 90 percent of future economic growth will be generated outside of Europe.

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