UPDATE 1-EU leaders agree to create permanent crisis fund

* EU leaders agree on need for treaty change

* Permanent crisis resolution mechanism to work from 2013

(Adds details, quotes)

BRUSSELS, Dec 16 (BestGrowthStock) – European Union leaders agreed
at a summit on Thursday to make minor changes to the EU’s
governing treaty to set up a permanent mechanism from mid-2013
to solve sovereign debt problems.

The leaders agreed to insert two sentences into the treaty,
a draft summit statement showed.

“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 as a whole,” it said.

“The granting of any required financial assistance under the
mechanism will be made subject to strict conditionality.”

EU Council President Herman Van Rompuy wants member states
to start work next year on securing ratification of the changes
so that the fund can be active from mid-2013.

The permanent fund, to be called the European Stability
Mechanism (ESM), will replace a temporary system — a 750
billion euro ($1 trillion) emergency loan facility created by
the EU and the IMF in May.

In their draft statement, the EU leaders agreed the ESM
would “provide the necessary tool for dealing with such cases of
risk to the financial stability of the euro area as a whole as
have been experienced in 2010.”

They also agreed that EU member states that are not part of
the euro zone can be involved in the ESM “if they so wish”.

“They may decide to participate in operations conducted by
the mechanism on an ad hoc basis,” the draft statement, or
summit conclusions, said.

UPDATE 1-EU leaders agree to create permanent crisis fund