BRUSSELS — After 18 disappointing summits since the start of the debt crisis, Europe’s leaders appeared Friday to have finally come up with quick fixes and long-term plans that show they are serious about restoring confidence in their currency union.
Global markets sighed with relief. Debt-saddled Italy and Spain appeared victorious, and Germany’s Angela Merkel faced potential criticism at home for conceding to pressure for an immediate deal.
Leaders of 17 countries that use the euro agreed to:
• Allow two European bailout funds to pump money directly into troubled European banks, rather than make loans to governments to bail out the banks. The move rescues banks without putting strapped countries deeper in debt.
• Use bailout money “in a flexible and efficient manner to stabilize” European government bond markets.
• Let countries that have made economic reforms as required by EU authorities to tap the European rescue funds without submitting to stringent bailout programs.
• Tie their budgets, currency and governments ever tighter in a vast new economic union down the line.
European Council President Herman Van Rompuy called it a “breakthrough.” Global stock markets and the euro rallied hard.
Concerns remain. Most of the measures approved in the Brussels summit will take months to come into force. The $630 billion firepower of the permanent bailout fund might not be enough. And given how shaky Spain’s and Italy’s finances are, and how jittery markets are, new roadblocks could send the continent back into crisis.
