France’s Lagarde: EU rescues ‘violated’ rules -WSJ

PARIS, Dec 17 (BestGrowthStock) – Euro zone policymakers
deliberately chose to “violate” the bloc’s rules in rescuing
Greece and Ireland, closing ranks to protect the single currency
area’s future, French Economy Minister Christine Lagarde was
quoted as saying.

The EU’s governing Lisbon Treaty places constraints on
bailouts. European leaders agreed at a summit on Thursday to
amend it by creating a permanent financial safety net from 2013.
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In comments reported on Saturday by the Wall Street Journal,
Lagarde said the amendment amounted to a “major adjustment”, but
that a change was necessary after the tumult of this year’s debt
crisis.

The Greek and Irish bailouts and the creation of a temporary
European rescue fund had been “major transgressions” of the
treaty.

“We violated all the rules because we wanted to close ranks
and really rescue the euro zone,” Lagarde was quoted as saying.

“The Treaty of Lisbon was very straight-forward. No
bailout.”

The summit approved a two-sentence amendment to the treaty
at Germany’s behest to permit the creation of a European
Stability Mechanism to handle financial crises from 2013.
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The ESM, to replace a temporary European Financial Stability
Facility created in May, will be empowered to grant loans on
strict conditions to member states in distress, with private
sector bondholders sharing the cost of any sovereign debt
writedown on a case-by-case basis.

The aim is for all 27 member states to ratify the change by
end-2012.

(Reporting by Leigh Thomas; Editing by John Stonestreet)

France’s Lagarde: EU rescues ‘violated’ rules -WSJ