The refusal by David Cameron, UK prime minister, caused consternation at a stormy two-day summit, leaving the EU deeply divided. It forced the eurozone’s 17 members, led by Germany and France, to opt instead for an intergovernmental deal that will have to be negotiated outside the EU legal framework.
Angela Merkel, Germany’s chancellor, insisted that the agreement still marked a “breakthrough to a stability union” that would open the way for full fiscal union in the eurozone. At least six EU members outside the currency bloc will also participate in the agreement.
By agreeing on much closer fiscal integration with strict rules and semi-automatic sanctions to enforce budget discipline, Ms Merkel said the confidence of the financial markets would be restored.
The deal was immediately welcomed by Mario Draghi, president of the European Central Bank, who said the treaty, to be drafted by March, would be “the basis for a good fiscal compact and more discipline in economic policy in the euro area members”...........