Merkel Gets Lisbon Treaty Clout for Currency Clause
Angela Merkel’s plan has cleared the next hurdle. At the EU summit in Brussels, the European Council on Thursday agreed to anchor a permanent mechanism for potential future euro crises in the Lisbon Treaty. What had been derided in summer as a unilateral demand from Berlin has now become European consensus.
European leaders want to insert two sentences into Article 136 of the Lisbon Treaty: “The member states whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of financial assistance under the mechanism will be made subject to strict conditionality.”
The formulation would allow Europe to save heavily indebted member states from bankruptcy even after the temporary €750 billion ($1 trillion) backstop expires in 2013. A permanent mechanism, European leaders hope, will provide lasting stability for the euro. Merkel had insisted on the treaty amendment in part to avoid a scenario in which future bailouts could be challenged in German courts.