EU Summit gives thumps up to new fiscal pact

The first EU Summit of 2012 ended on Monday with leaders of 27 European nations agreeing to sign a new fiscal treaty, except Czech Republic and Britain. Once effective, the fiscal agreement would legally bind the member nations to implement tougher austerity measures and stricter enforcement rules in their respective country. To ensure its effective functioning, the proposed deal empowers the European Court of Justice with the right to impose fine on nations who fail to follow the new rules.

Also in the recently concluded European Summit, it was decided to bring into effect the European Stability Mechanism in July instead of 2013, which was the original plan. The €500 billion permanent bail-out fund formed on May last year was aimed to insulate the rest of Europe from debt crisis, especially from Greece.

Apart from these two issues, leaders of the European nations also discussed ways to generate employment and encourage small business growth. But, one key issue that has been left largely unanswered in the European Summit is the question of Greece debt crisis. Till Europe finds a comprehensive way to deal with Greece debt crisis, it is very likely that European debt crisis would continue to haunt Europe.