The deal reached at a summit of European leaders in Brussels represents a compromise between the Germans and French, who had been tussling over how best shore up the region's stricken banking system — one of the main causes of Europe's debt crisis.
Leaders agreed in June that, once a supervisor is in place, struggling financial institutions would be able to tap Europe's emergency bailout fund, the European Stability Mechanism, directly.
[...] Germany's Chancellor Merkel, wary of using taxpayers' money to prop up other countries' banks, tried to put the brakes on the plan, insisting that creating the supervisor should be done slowly and that "quality must come before speed".
Merkel is pushing a proposal for the European Union's monetary affairs commissioner to become an enforcer of the bloc's budget rules — including the power to refuse member countries' proposed spending and tax plans and send them back for changes.
Germany hopes that having a "budget czar" — a move that's been bandied about for months — will help keep Europe from repeating past mistakes by stopping governments from overspending and needing expensive bailouts.
[...] the political pressure on Spain is great because should investors become convinced that Madrid will not request aid, they may once again sell off the country's bonds, causing its borrowing rates to rise.
Leaders could also discuss Greece, where rioters were pelting police with Molotov cocktails and chunks of marble on Thursday to protest the stringent budget cuts the country has had to implement to secure its rescue loans.
Leaders agreed in June that, once a supervisor is in place, struggling financial institutions would be able to tap Europe's emergency bailout fund, the European Stability Mechanism, directly.
[...] Germany's Chancellor Merkel, wary of using taxpayers' money to prop up other countries' banks, tried to put the brakes on the plan, insisting that creating the supervisor should be done slowly and that "quality must come before speed".
Merkel is pushing a proposal for the European Union's monetary affairs commissioner to become an enforcer of the bloc's budget rules — including the power to refuse member countries' proposed spending and tax plans and send them back for changes.
Germany hopes that having a "budget czar" — a move that's been bandied about for months — will help keep Europe from repeating past mistakes by stopping governments from overspending and needing expensive bailouts.
[...] the political pressure on Spain is great because should investors become convinced that Madrid will not request aid, they may once again sell off the country's bonds, causing its borrowing rates to rise.
Leaders could also discuss Greece, where rioters were pelting police with Molotov cocktails and chunks of marble on Thursday to protest the stringent budget cuts the country has had to implement to secure its rescue loans.
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