EU’s Barroso to tell EU leaders debt crisis now systemic

BRUSSELS, Dec 16 (BestGrowthStock) – The euro zone sovereign debt
crisis has become systemic and requires steps for the whole euro
zone and specific ones for member states, European Commission
President Jose Manuel Barroso will tell EU leaders on Thursday.

Barroso’s speaking notes prepared for the summit, obtained
by Reuters, show the head of the EU executive believes one of
the reasons for the crisis is that markets were mispricing euro
zone risk and acting as a herd.

“The current sovereign crisis has now become systemic in
nature, and is driven not only by budgetary fundamentals, but
also by the mispricing of credit risk by investors and
short-term herding behaviour in the markets,” the notes say.

EU leaders will discuss limited treaty change on Thursday
and Friday to pave the way for the creation of a European
Stability Mechansim to resolve debt crisis from mid-2013.

(Reporting by Jan Strupczewski, editing by Luke Baker)

EU’s Barroso to tell EU leaders debt crisis now systemic