March 2, 2012 / 1:18 PM / in 6 years

Highlights: Leaders' comments from European Union summit

BRUSSELS (Reuters) - European Union leaders met for a second day of talks in Brussels on Friday, where 25 of the bloc’s 27 countries signed a “fiscal compact” enshrining common debt rules among the 17 members of the euro zone.

The heads of state and government also discussed the situation in Syria.

Following are highlights of leaders comments after the meeting:

GREEK PRIME MINISTER LUCAS PAPADEMOS

ON EXTERNAL MONITORING OF GREECE:

“I’ve already said that there is no discussion to appoint a commissioner for Greece, this would not be acceptable. On the other hand, the monitoring of the(EU/IMF) troika in Greece will be strengthened.”

ON ECONOMIC GROWTH AND SITUATION IN GREECE:

“The time has come to replace the vicious cycle of recession and budget cuts with a virtuous cycle of reforms and growth. Everyone understands that now, both in Greece and in Europe.”

“These (EU growth) measures open a window of opportunity to get out of the crisis.”

“Europe is casting a vote of confidence in us, let’s not disappoint it. We must prove wrong all those who say that the program can’t work and that Greece will fail. Greece can.”

“Greece is changing, the efforts are bearing fruit. I am leaving Brussels with the conviction that things can turn for the better.”

ON PRIVATE SECTOR INITIATIVE (PSI) DEBT SWAP FOR PRIVATE

BONDHOLDERS:

“I expect significant, sufficient participation of the private sector in the PSI (debt swap).”

“The offer made to bondholders is attractive, that’s why I believe that its take-up will be satisfactory.”

GERMAN CHANCELLOR ANGELA MERKEL

ON EURO ZONE FINANCIAL CRISIS:

“We are shown by the activities of the European Central Bank that we not in a normal situation. We are still in a fragile situation. This situation is somewhat calmer but the crisis has not at all been overcome. Further steps are necessary to achieve this.”

“The next two years as just as decisive as the last two years.”

ON ECB LIQUIDITY SUPPORT AND POSSIBLE FINANCIAL BUBBLES:

”We must avoid exactly that. We will use this time. We will certainly not take such additional measures. The liquidity goes out of the market again.

“It is important that we don’t forget when the interest rates go down because of a stabilization in the banking system, the problems are not solved in the long term.”

ON BUYING TIME:

”The apparently calmer current situation in the euro zone is calmer because the European Central Bank supported banks very strongly with liquidity assistance with a length of three years.

”This step is important, but it makes time available and reminds us to think about addressing shortcomings in the euro zone in a serious way.

“That involves the issue of stable budgets. Secondly, it involves the improvement of competitiveness. There is a lot to be done. That leads us to the issue of growth.”

SPANISH PRIME MINISTER MARIANO RAJOY

ON SPANISH BUDGET DEFICITS AND AUSTERITY:

“This year the effort to reduce the structural deficit will be 3.5 (percent), because we have to compensate for what wasn’t done last year. The objective for the public deficit during the coming year (2012) will be 5.8 percent.”

“Going from 8.5 percent (2011 deficit) to 5.8 percent (in 2012) is significant austerity.”

EUROPEAN COUNCIL PRESIDENT HERMAN VAN ROMPUY

ON BUDGET DEFICITS AND TARGETS:

”For the credibility of our operation we must maintain the budgetary objectives and if we don’t do that in a consistent way, then the financial markets will punish us.

“What you think you will get from weakening the budgetary measures you will lose in increases in interest rates.”

ON SITUATION IN SYRIA:

“The European Council remains determined to ensure that those responsible for the atrocities being committed in Syria are held accountable for their actions.”

ON EUROPEAN STABILITY MECHANISM (ESM) PERMANENT BAILOUT FUND

AND EFSF TEMPORARY FUND:

“We reaffirmed our pledge to accelerate the payment of capital for the ESM, beginning with the payment of two tranches in (2012), and we will revaluate the ceiling for the ESM and EFSF during the month of March, and that will be at the level of the Eurogroup finance ministers.”

Following are highlights of leaders’ earlier comments, on arrival at the meeting:

BELGIAN PRIME MINISTER ELIO DI RUPO

ON CONTINUING VIOLENCE IN SYRIA:

“All government leaders not only condemn strongly what is happening, but also hope for an agreement in the United Nations Security Council. It’s good to note that things are advancing on the humanitarian side, but it is not sufficient. We need to go further.”

BRITISH PRIME MINISTER DAVID CAMERON

ON SYRIA:

”What we are going to be discussing today... is the situation in Syria, which is absolutely appalling, and it is vitally important that there is humanitarian access into Homs, and elsewhere, so that people can get the help they need.

“But, above all, what I think matters is building the evidence, and the picture, so we hold this criminal regime to account, and to make sure that it is held to account for its crimes that it is committing against its people, and that one day, no matter how long it takes, there will be a day of reckoning for this dreadful regime.”

GERMAN CHANCELLOR ANGELA MERKEL

ON SIGNING THE FISCAL COMPACT:

”We will now sign the fiscal compact as the first thing this morning. I believe it’s a milestone in the history of the European Union.

”For the first time we are committing ourselves to put into place what is in the stability and growth pact. We are committing ourselves to the extent that we are allowing the European Court of Justice to verify whether the debt brakes are applied correctly.

“I think it’s a strong signal that we have learned from the crisis and understood the signals and that we are banking on the future of a politically united Europe.”

EUROPEAN COUNCIL PRESIDENT HERMAN VAN ROMPUY

ON FISCAL COMPACT:

”We here have achieved a fine balance between the 17, the 25 and the 27, workable for all.

”After today’s signature comes the moment for ratification. You now all have to convince your parliaments and voters that this treaty is an important step to bring the euro, durably, back to safe waters.

“I am most confident you will succeed. The treaty is short and sharp. Its benefits are clear and, above all, you are all gifted politicians otherwise you wouldn’t be here. So let us bring the child to life.”

FINNISH PRIME MINISTER JYRKI KATAINEN

ON FISCAL COMPACT:

“It is important because it will strengthen the credibility of the euro area and the economic policy. It’s an achievement that we have changed our fiscal rules and strengthened the EU’s economic policy in the long-run.”

ON GREECE:

“we don’t have a plan B because we have a chosen a way to deal with the crisis and now Greece has a very good opportunity to do what they have to do. They have the austerity measures and now confidence will follow.”

Reporting by Robin Emmott, John O'Donnell, Harry Papachristou, Ben Deighton, Robert-Jan Bartunek, Charlie Dunmore, Sebastian Moffett and Claire Davenport

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