BRUSSELS: Eurozone leaders will discover Monday whether a surprise agreement to beef-up debt rescue funding will meet approval on markets seeking credible enforcement of tightened economic policy coordination.
Finance ministers from the 17-nation eurozone pick up where prime ministers, presidents and chancellors left off in the early hours of Saturday, meeting in Brussels at 1000 GMT before being joined by their 10 other European Union counterparts at 1400 GMT.
A packed calendar of work has to seal defences against a destabilising debt crisis stalking weaker members in Greece, Ireland, Portugal and even Spain, before a self-imposed deadline of a March 24-25 summit for the full 27 EU leaders to deliver their promised "comprehensive" response.
"European leaders cannot afford to pretend much longer that all will be well with a bit more belt-tightening and a set of fiscal rules that lack credible enforcement mechanisms," the Financial Times said in a post-summit editorial.
The eurozone leaders struck four agreements at the weekend, deciding to:
-- raise lending capacity under current and post-2013 rescue funds to 440 billion euros and 500 billion respectively;
-- allow the funds to buy sovereign debt at issue within the straitjacket of a negotiated bailout and national austerity programme;
-- lower the interest rates charged of those needing aid and lengthening repayment periods from three to seven-and-a-half years (although Greece's drop from some 5.2 percent to 4.2 percent, worth six billion euros under its 110-billion package of loans, was not extended to Ireland due to a row over business taxation levels likely to go to the summit wire;
-- and adopt a 'Euro Pact' designed to bring policies closer in a bid to make the eurozone economy more competitive up against rivals from around the world, but which rests on 'best practice' recommendations rather than fixed objectives.
Taken together, "this should go down well with the markets for now and lead to an easing of the eurozone's sovereign debt crisis in the near term at least," London-based analyst Howard Archer of IHS Global Insight said on Sunday.
However, sovereign bond markets, which pushed Portugal's rates above the levels that triggered the Greek and Irish bailouts last year, and credit rating agencies, which also downgraded the weakest before the Friday night eurozone summit began, will need to see sustained action before the crisis can be deemed over.
And when it comes to enforcing new agreements, Archer says the next phase "will depend critically on the ability of Greece, Ireland, Portugal and even Spain to enact and see through" the changes required.
"Any respite in the markets will prove to be only a temporary reprieve if countries do not deliver the required action on public finances, banks and boosting long-term competitiveness," he underlined.
The finance ministers' talks are about putting meat on the bone, with another EU session on Tuesday to assess the "state of play" in tough negotiations about detailed rules for cross-border economic governance and their enforcement.
This has proved deeply difficult, internal documents seen by AFP consistently show, as countries willing to sign up to political principles work to ensure wriggle-room in practice given the plan involves financial penalties where budgetary decisions impinge on partners.
The European Parliament carries legislative clout in this area, and wants to ensure as few loopholes as possible are inserted into an eventual deal on the nitty-gritty.
One of the areas Germany and France particularly want tightened up is business taxation, and the European Commission will spell out its ideas on harmonising rates or levels on Wednesday.
A row which peaked during Friday night's summit with a clash between new Irish premier Enda Kenny and French President Nicolas Sarkozy -- Dublin refused to raise its rock-bottom 12.5 percent business tax rate, with the result partners refused to meet a demand to lower Ireland's bailout costs -- can be expected to rumble on for weeks.
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