The EU announced on Friday the establishment of a new “fiscal compact” with an overwhelming majority of countries led by Germany and France, despite failure to agree on tougher fiscal discipline through treaty changes for all EU 27 nations.
The initiative led by France and Germany was approved by all euro zone members and six other non-euro nations, after Britain’s opposition to amend the EU treaty thwarted the efforts to forge agreement among all 27 states to strengthen the euro zone.
In the face of UK’s opposition, EU leaders decided to focus on a deal among only the 17 members of the currency, which would impose closer scrutiny and stronger fiscal rule among signatories.
Although it is unfortunate, “we have made the best of it. And it is quite achievement that not only the eurozone countries have joined the fiscal compact, but almost all other 10 non-eurozone EU countries want to participate in it,” the Head of the European Council, Herman Van Rompuy said.
Following the EU summit on Friday, German Chancellor Angela Merkel and French Prsident, Nicolas Sarkozy expressed regret for the UK’s splitting ways with the rest of the union.
“As you knew we would have preferred a reform of EU treaties among 27 states,” said French President Nicolas Sarkozy. “It was not possible because of the position of our British friends. Therefore it will be an inter-governemental treaty among 17, open to all those who may want to join us.”
The failure to achieve an agreement among all members of the EU reflected the deep split between Franceand Germany on one hand and Britain on the other.