BRUSSELS: The European Union faced a new round of risky treaty change Friday after its leaders agreed to embark on landmark reforms designed to fend off another financial crisis by shoring up the euro. Less than a year after turning a page on a decade of fraught negotiations and failed referendums that ushered in the Lisbon Treaty, the bloc's 27 leaders agreed to rewrite the rule-book in talks that dragged into the wee hours. It was the price to pay to avoid a repeat of this year's Greek turmoil. But a senior diplomat warned they faced “mission impossible as there'll be as many opinions on the subject as there are EU states.” “This spring we overcame a deep crisis of economic and monetary union,” said EU President Herman Van Rompuy. “Our next political duty was to draw the lessons for the future, to make the European economies more crisis-proof.” The agreement sealed under pressure from “impassioned” German Chancellor Angela Merkel endorses “limited” change to the Lisbon Treaty, which came into force last December. Berlin, backed by Paris, demanded that the treaty be tweaked to accomodate the creation of a permanent rescue fund to help nations in financial distress, a decision also taken at the summit. Germany, Europe's biggest economy contributed the lion's share of eurozone commitments to an existing 440-billion-euro European Financial Stability Fund (EFSF), hastily set up in May to save Greece, but which the EU 27 now want turned into a “permanent crisis mechanism.” But the Lisbon Treaty bans members from bailing each other out and Merkel consequently feared Germany's powerful constitutional court would throw a spanner in the new EU financial works. “The euro has emerged strengthened,” a defiant Merkel said after emerging from seven arduous hours of talks with an agreement to establish the fund safeguarding the financial stability of the euro area as a whole. Van Rompuy will now undertake consultations to legally underpin the rescue fund, with more talks set for a December summit and a final decision on “light” treaty change to come into force by mid-2013. That is the expiry date for the existing EFSF set up to reassure markets in the aftermath of the Greek crisis. But diplomats warned before the ink was dry that the road even to light change could be rocky. Separately, in Washington, the economy grew slightly faster last summer as Americans spent a little more _ but far too little to reduce the high unemployment that is frustrating voters. The Commerce Department said Friday that the economy expanded at a 2 percent annual rate in the July-September quarter. It marked an improvement from the feeble 1.7 percent growth in the April-June quarter. Consumers helped boost last quarter's economic growth with 2.6 percent growth in spending, slightly better than the 2.2 percent rate in the second quarter. Businesses also spent more to replenish their stockpiles. That trend has provided a big lift to the economy since the recession ended. But economists note that businesses will no longer need to rebuild their stockpiles so much in coming months.
