Eurozone show of unity will be tested

STABILITY PLEDGES

EU leaders declared that they “stand ready to do whatever is required to ensure the stability of the euro area”. They called for “determined action” in the following areas:
Full implemention of existing programmes
Maintaining fiscal responsibility
Stepping up growth and enhancing structural reforms
Strengthening the stability and growth pact and implementing a new macro-surveillance framework from mid-2011
Ensuring the availability of adequate financial support through the European Financial Stability Facility pending the entry into force of the permanent European Stability Mechanism
Further strengthening of the financial system
Expressing full support for European Central Bank action.

Important features of the European Stability Mechanism:

Created by an amendment to article 136 of the Lisbon treaty, on rules applying to countries in the eurozone.
Activated by mutual consent of eurozone countries, in case of a risk to the stability of the eurozone as a whole.
Countries outside the eurozone can choose to take part in work on preparation of the mechanism.

Timeline for the creation of the European Stability Mechanism:

Decision drafted by European Council, using simplified procedure for revision of the EU treaty – article 48(6) – is sent to European Commission, European Central Bank and European Parliament for consultation.

Eurozone finance ministers and European Commission to complete work on mechanism by March. 

Decision to be formally adopted by European Council in March.

National ratification procedures to be completed by the end of 2012.

Entry into force of revised treaty on 1 January 2013.