The EU leaders are stepping up the efforts to contain the debt crisis and today they gather in Brussels for the first 2012 summit to finalize their December decisions for deeper fiscal integration and the creation of the permanent rescue facility to safeguard the euro area and help end the debt crisis and emerge a stronger and more competitive economic block which only leaves the United Kingdom outside of this equation.
The summit will focus on the ongoing Greek talks with the private sector as bondholders are near agreement with the government to endure voluntary losses that matches the requirements of the EU and the IMF and that will open the door for the debt-laden nation to receive a new bailout of 130-billion euros according to the initial agreement outlined last October.
As for the bigger picture, the leaders will continue to work on the Merkel-Sarkozy steps that are to focus on the bases of the new fiscal integration and focus on support growth and employment to fight the crisis.
Another highlight of the summit will be the permanent rescue facility that will be in place to replace the temporary funds. The ESM (European Stability Mechanism) will retire the current EFSF and the fund is initially in talks to be started at 500 billion euros and although at the previous summit we saw German objections to its expansion, since then we saw a more lenient stance from Merkel towards the expansion. Nevertheless, the size of the new rescue facility is likely to remain at 500 billion for now and not be discussed until the final summit that should see the creation and adoption of the December agreement in March.