EU officials laid out a new agreement to tighten fiscal rules for the eurozone and other participating EU countries on Friday, hoping to push ahead with deeper economic integration and get on top of the two-year-old debt crisis. The eight-page draft agreement will be discussed by member states for the first time at a meeting in Brussels on Tuesday, with the aim of securing ratification from at least nine eurozone countries potentially by the end of January, a threshold that would bring the agreement into force as soon as March.
The deal - dubbed a new "fiscal compact" by European Central Bank chief Mario Draghi - was drafted after a summit on December 8-9, when all EU leaders, except Britain's David Cameron, agreed that it was the right way forward. While isolated in the immediate aftermath of the summit, Britain will be allowed to follow discussions on the new agreement as an "observer", joining the other 26 EU countries as they negotiate the fine print of the deal.
"It's quite clear: the UK will be there with observer status," an EU official told reporters. "The UK said from the outset they didn't want to get involved in this text, so they will be there, but as an observer for the whole process." The main aim of the agreement is to bind eurozone countries into tighter fiscal rules, including the need to keep their budget deficits below three percent of gross domestic product and their debt levels below 60 percent of GDP.
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