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29 October 2010

European Council agrees small Treaty change that may bail-in private creditors

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The Council agreed the need for a permanent crisis mechanism with very strong conditionality. The Commission and President van Rompuy will prepare the general features of a mechanism that includes the role of the private sector.

Further to the report of the Task Force, and in order to ensure balanced and sustainable
growth, Heads of State or Government agree on the need for Member States to establish a
permanent crisis mechanism to safeguard the financial stability of the euro area as a whole
and invite the President of the European Council to undertake consultations with the members
of the European Council on a limited treaty change required to that effect, not modifying
article 125 TFEU ("no bail-out" clause).
The European Council welcomes the intention of the Commission to undertake, in close
consultation with the President of the European Council, preparatory work on the general
features of a future new mechanism, i.a. the role of the private sector, the role of the IMF and
the very strong conditionality under which such programmes should operate.
The European Council will revert to this matter at its December meeting with a view to taking
the final decision both on the outline of a crisis mechanism and on a limited treaty amendment
so that any change can be ratified at the latest by mid-2013.

© European Council

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