EU leaders end year on high with Greece, bank deals

EU leaders put a crisis-hit year behind them at the last summit of 2012 Friday, trumpeting hard-fought deals on Greece and banks but seemed to row back on reforms to fix the euro's shortcomings, AFP reports. "Even if the worse of the eurozone crisis is behind us, much still needs to be done. But all the hard work is beginning to pay off. A lot has been achieved over the course of a year," said EU President Herman Van Rompuy. Van Rompuy hailed a deal clinched by finance ministers earlier to disburse much-needed funds to crisis-wracked Greece, saying it proved "the irreversibility of the eurozone and the euro." After a buy-back programme designed to reduce Greece's debt mountain, Eurogroup head Jean-Claude Juncker said a first payment of 34.3 billion euros ($44.7 billion) would be flowing to Athens "as early as next week." This instalment would go to help recapitalise Greece's crisis-wracked banks, to be followed by another 14.8 billion euros in the first quarter of next year. The accord prompted Greek Prime Minister Antonis Samaras to declare that "Grexit", the idea that Greece would be forced out of the 17-nation bloc, was "dead." "Greece is back on its feet," declared an ecstatic Samaras, who has pushed through painful economic reforms demanded by international creditors, sometimes in the face of violent street protests. Van Rompuy also declared as a "breakthrough" a deal that would see the eurozone's largest banks come under the aegis of the European Central Bank from March 2014. This is the first step on the path to what leaders hope will become a fully fledged banking union and paves the way for the European bailout funds to recapitalise directly struggling banks. ECB chief Mario Draghi hailed the accord as "an important step towards a stable economic and monetary union, and towards further European integration". Van Rompuy said the union, sometimes accused of progressing at a glacial pace, had shown it could act quickly in times of crisis. "Back in June we asked to be ready in December and we delivered. This clearly shows the union's ability to take timely and decisive action. It is our way, our European way of working," he told reporters. -- Scaling back ambitions -- Nevertheless, the summit's formal purpose was to agree moves to plug the holes in the eurozone's construction that have been brutally laid bare by the three-year debt crisis that has plunged it into recession. Here, ambitions appear to have been scaled back. French President Francois Hollande acknowledged that any major reforms requiring treaty changes would not come next year. "In 2014, there will be elections in the European Parliament, there will be a new (European) Commission. It will therefore be at that moment that we could envisage a modification of the treaties," he told reporters. Van Rompuy said he would present another report to leaders in June 2013 setting out how to co-ordinate economic policies more closely, as well as proposing that member states sign up to contracts with the EU on reforms. Countries committing to such contractual arrangements might eventually benefit from "a solidarity mechanism", Van Rompuy said, although details remained murky. German Chancellor Angela Merkel, Europe's effective paymaster, said there "could be possibly financial aid available to support those who are fully committed to consolidation" of their budgets. Despite a noticeably more bullish tone at the summit, political uncertainty in Italy lurked in the background, after Prime Minister Mario Monti, credited with important reforms in Italy, said he was stepping down soon. Former leader Silvio Berlusconi had hinted that he might stand for a fourth time but appeared to row back on the sidelines of the summit, telling Belgian television channel VRT that he had "so much to do" outside politics. Hollande downplayed the chance Berlusconi would run in a future election, saying: "I don't think there is a very serious likelihood" of this." Merkel underlined a closing of ranks at the summit. "I made clear that the government of Mario Monti has done a great deal of helpful work for the confidence that Italy is now enjoying again," she said. Leaders were to reconvene later Friday at 10:00am (0900 GMT) to discuss moves towards a common security and defence policy as well as to take a position on the Syria crisis.