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EU summit ends with mixed results

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The European Union's closely watched summit ended today with mixed results. In principle, all but one of the 27 EU members -- the United Kingdom -- backed a tax and budget plan. But concrete approval remains elusive for many of the countries on the continent.Ireland, for example, now requires a public referendum to amend its participation in the euro zone. And another three countries' participation rests on national parliamentary approval.

The U.K.'s Prime Minister David Cameron, citing the need to protect London's financial markets, opposed the plan, but affirmed a stable euro was in Britain's best interests.

Due to the U.K.'s effective veto, the EU Treaty itself will not be amended.

Instead participating countries will have to sign a separate fiscal compact that includes penalties for those whose deficit exceeds 3% of GDP and confirms that the European Stability Mechanism will only provide up to €500 billion in bailout funds.

All 27 countries agreed to fund up to €200 billion in loans channeled through the IMF for euro zone sovereign debt purchases.

Ironically, increased integration of the euro zone's financial markets incited the crisis, but the fiscal plan will further integrate the EU.

At the summit's end, German Chancellor Angela Merkel stated, "We have taken an important first step towards permanent euro stability."

The euro rose 0.39% by the end of New York trading after spending most of the day in neutral territory at best.

The Dow Industrials average surged, ending the day up 1.55% at 12,184.26.

Investors, however, remain skeptical that the summit's fiscal plan will be sufficient to end the euro zone crisis.

Just today, the European Central Bank (ECB) had to intervene in the secondary markets to support Italian and Spanish bonds.

Greater action by the ECB is desired, but the Bank remains reluctant to increase the size of its purchases.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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