El Pais

Zapatero satisfied with EU summit agreement to strengthen euro

Outgoing prime minister says time will tell if pact assuages market doubts

MIGUEL GONZÁLEZ - Madrid - 09/12/2011

The Spanish delegation participating in the EU's emergency summit in Brussels said it was satisfied with the intergovernmental pact reached in the early hours of Friday, even though Spain failed to obtain power of veto over a future European Stability Mechanism (ESM) as desired.

Outgoing Prime Minister José Luis Rodríguez Zapatero had said ahead of the meeting that he would seek a "forceful" deal, or at least one that appeared so, to allay market fears over the solvency of euro-zone members and relieve the pressure on Spain's sovereign debt. Spain's risk premium on Friday closed down 20 basis points, at 359 basis points.

The incoming conservative leader, Mariano Rajoy of the Popular Party, who will take power on December 21, had asked Zapatero to raise the necessary vote percentage to use the ESM from 85 percent to 90 percent, which would have given Spain power of veto together with France, Germany and Italy.

Although Britain refused to endorse the pact agreed to by the other 26 union members, European leaders believe that the increased fiscal and financial discipline will send out a message of unity to the markets and keep the specter of a euro breakup at bay.

Zapatero would not say whether those goals have been effectively achieved. "Experience has shown us that you need to wait 24 to 48 hours," said the head of the caretaker government at the last of his 44 European summits.

In recent days, Spanish savers have grown increasingly concerned over the possibility - once viewed as remote - that the country could suddenly return to the peseta and undergo a significant devaluation similar to Argentina's a decade ago.