EU Nation Leaders Meet to Save Euro

January 11, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. spearhead (v.) [speer-hed] – to lead or to start
Example: The leader spearheaded the team in completing the difficult project.

2. default (n.) [dih-fawlt] – in economics, the failure to fulfill financial obligations, especially paying debts
Example: The company declared default on their debts due to bankruptcy.

3.  legislate (v.) [lej-is-leyt] – to make a law
Example: The new educational decree legislates learning English as part of the curriculum.

4. credibility (n.) [kred-uh-bil-i-tee] – the quality of being believed or accepted as true, real, or honest
Example: His dishonesty ruined his credibility as the leader of the team.

5. predicament (n.) [pri-dik-uh-muhnt] – a problematic or dangerous situation
Example: The company president remains optimistic despite the predicaments brought by the economic crisis.

Read the text below.

Leaders from the 27 European Union nations held a two-day summit in Brussels last December to discuss a proposal to resolve the euro crisis. The proposal, spearheaded by France and Germany, aims to reform the EU Treaty by imposing stricter financial rules.

But on the first day of the summit, some countries were still not sure if the plan would work.  A draft of the summit’s initial conclusions also mentioned adjusting countries’ deficit limit from 3% of their GDP to 0.5%. It also included a move that Germany opposed -- increasing the eurozone bailout fund to more than 500 billion euros for countries that might declare default.

In general, France and Germany aim to push changes in the EU Treaty to include stricter fiscal rules. The Franco-German plan allows the European Commission to impose penalties on eurozone nations that would have excessive budget deficits. The plan also requires eurozone nations to legislate the need to have balanced budgets, and proposes measures that protect the interests of corporations and private investors in terms of tax policies and governments bonds.

German Chancellor Angela Merkel said that the Euro's credibility needs to be restored. Giving more powers to the European Commission and the European Court to enforce rules would result to greater coordination between countries, she said. French President Nicolas Sarkozy added that Europe has never been as significant in the global economy as it is today, but it has also never been in an economic predicament as serious as the Euro crisis. He encouraged leaders of eurozone nations to hurry in their decision to adopt the Franco-German proposal for time is running against them.

By the end of the summit, 26 out of the 27 EU nations, including the 17 eurozone nations, agreed to most parts of the Franco-German plan. Only the UK, a non-eurozone country, opposed the proposal. UK prime minister David Cameron made it clear during the summit that he could not agree to a plan that may harm the British economy.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

      How do you think economic problems affect ordinary citizens?
      How are you affected by the world’s economic problems?

Discussion B

      Do you think it is possible to prevent economic problems? Please explain your answer.
      Do you think ordinary citizens can contribute in the prevention of economic problems? Please explain your answer.

January 11, 2012