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EU Leaders Agree To Set Up Permanent Crisis Fund

EU President Herman Van Rompuy

EU President Herman Van Rompuy

European Union leaders have agreed to set up a permanent fund to help any member state whose debt problems threaten the stability of the 16-member eurozone.

EU President Herman Van Rompuy, speaking at a summit in Brussels on December 16, reiterated that EU leaders are determined to protect the stability of the common currency.

"Our determination is clear," Van Rompuy said. "The heads of state and government of the eurozone stand ready to do whatever is required to ensure the stability of the eurozone as a whole."

He said EU leaders agreed an amendment to the EU's Lisbon Treaty to allow for the creation of a European Stability Mechanism in 2013.

It will replace a temporary 750 billion-euro ($950 billion) fund the EU, together with the International Monetary Fund (IMF), set up this year to bail out heavily indebted eurozone members.

Greece and Ireland have already received emergency EU/IMF bailouts, and now there are fears that Portugal and Spain could be next.

Van Rompuy said no country would need to put the amendment to a referendum, thus avoiding a potential risk to the Lisbon Treaty, which took years to negotiate.

Leaders have not agreed on details of the new rescue mechanism yet, including how much money will go into it.

The EU summit, which wraps up today, is the seventh this year -- a record number due to the crisis.

compiled from agency reports