The new Summit decisions marked a major step towards a convergence of fiscal policy, according to PM Lucas Papademos.

At a press conference in Brussels on Friday, Mr. Papademos stated that a financial regulation was adopted that budgets should be balanced, ie not have a deficit above 0.5%.

He stressed that the regulation should be incorporated in the Constitution and that the assessment should be made by the European Court.

“The states in excessive deficit will submit structural plans and take new measures”, stated Mr. Papademos.

“If there are digressions, an adjustment mechanism will be activated”, he added.

“When a country does not meet the criterion of 3%, then automatic sanctions will occur”, he stated, and added that these automatic sanctions will trigger for Greece after the country achieves its target of zero deficits.

He even stated that if the target deficit is 0.5%, the spending for interest is included. “We are talking about a structural deficit”, stated the PM. Responding to questions about the 2012 budget and the upcoming talks with the Troika on the new program for the 2013-2015 period, he left open the possibility “of additional measures and interventions”, stating that “the backbone remains the same”

At this point, Finance Minister Evangelos Venizelos stated that the critical period for the execution of the current budget lasts until February 2012, and a national overexertion must be made in order to achieve the objectives. 

Mr. Papademos stated further that a EC report by Jose Manuel Barroso and Eurogroup President Jean-Claude Juncker in March 2012 will reexamine the Eurobond issue. The Greek PM added that the issue is not mentioned in the decision, since it will be included in the single economic policy.

At the same time, the Greek PM mentioned the increasing resources of the EFSF and the ESM.