Leaders of the 17-nation euro zone have agreed on a “Pact for the Euro” aimed at enhancing competitiveness and sustainability as well as the expansion of its bailout fund, both key elements of the envisaged comprehensive package to tackle the yearlong debt crisis.

“The Euro pact’s objectives are sustainable public finances, a competitive economy and sound financial systems,” President of the European Council Herman Van Rompuy said at a press conference held early Saturday after eight hours’ tough negotiations starting from Friday afternoon.

“An invisible loss of competitiveness was a driver of the public debt crisis in the euro zone,” the EU president said.

Euro zone leaders would announce measures under the pact to be put in place nationally at the upcoming EU-wide summit on March 24-25, according to Van Rompuy, adding that the peer pressure, apart from market and institutional pressures, would give the commitments under the pact a politically binding force.

Euro zone leaders also agreed in principle on other major elements of the comprehensive package, he said.

The bloc would make sure the full amount of the 440 billion euro temporary bailout fund and the 500 billion euro permanent mechanism available. Euro zone leaders also agreed to extend the maturity of the loans to Greece and lower the interest rates with 1 percent, according to him.

The Euro pact and the full package would be formally adopted by the next summit, the president said.

“It is a good pact in terms of competitiveness and convergence for the euro area,” said European Commission President Jose Manuel Barroso at the same press conference, adding that the pact was also open to non-euro zone area.

“Everything will come together at the European Council end of March. This should allow us to finally turn the corner,” Van Rompuy said.

Source: Xinhuanet