Twenty-three of the twenty-seven members of the euro area approve a new treaty to set a group policy to address the financial crisis. The UK, Sweden, Czech Republic, and Hungary voted against the provisions.
The new agreement will allow money to be leant to the financially weakest nations in the region. The countries in the alliance mean to make 200 billion euros available to the IMF. Bilateral loans could significantly increase that number.
The agreement also means that debt rules will be more rigorously enforced, a move that smaller nations think is a de facto takeover of the area by financially powerful Germany and France.
It remains to be see whether the agreement will call the markets. There will also be anxiety about whether credit agencies will stop from potential plans to downgrade sovereigns in the region.
Additionally, European Financial Stability Facility leverage will be rapidly available. The region’s rescue fund should be active by July 2012.