Euro Leaders To Back Competitiveness Pact, Pressure Portugal
Euro zone leaders are set to agree a "competitiveness pact" at a summit on Friday and will push Portugal to announce new reforms to increase market confidence as they seek to draw a line under the debt crisis, Reuters reported. Germany has lowered expectations for a major breakthrough at the summit, saying the best that can be hoped for is an agreement on competitiveness. Bigger decisions to tackle the crisis -- such as whether to strengthen the euro zone bailout fund -- will be handled at an end-March summit. Instead, Germany's aim on Friday is to get the 17 euro zone states to enshrine EU rules on deficits and debt in national law -- effectively making it illegal for any euro zone member to exceed fixed deficit and debt limits in the future. The EU's Stability and Growth Pact sets a government deficit limit of 3 percent of GDP and debt of 60 percent of GDP. Translating that into national laws would entail the adoption of a "debt brake," similar to what German law requires. Read more.