Egyptians hand Islamists narrow win in constitution vote






CAIRO (Reuters) – Egyptians voted in favor of a constitution shaped by Islamists but opposed by other groups who fear it will divide the Arab world’s biggest nation, officials in rival camps said on Sunday after the first round of a two-stage referendum.


Next week’s second round is likely to give another “yes” vote as it includes districts seen as more sympathetic towards Islamists, analysts say, meaning the constitution would be approved.






But the narrow win so far gives Islamist President Mohamed Mursi only limited grounds for celebration by showing the wide rifts in a country where he needs to build a consensus for tough economic reforms.


The Muslim Brotherhood‘s party, which propelled Mursi to office in a June election, said 56.5 percent backed the text. Official results are not expected until after the next round.


While an opposition official conceded the “yes” camp appeared to have won the first round, the opposition National Salvation Front said in a statement that voting abuses meant a rerun was needed – although it did not explicitly challenge the Brotherhood‘s vote tally.


Rights groups reported abuses such as polling stations opening late, officials telling people how to vote and bribery. They also criticized widespread religious campaigning which portrayed “no” voters as heretics.


A joint statement by seven human rights groups urged the referendum’s organizers “to avoid these mistakes in the second stage of the referendum and to restage the first phase again”.


Mursi and his backers say the constitution is vital to move Egypt’s democratic transition forward. Opponents say the basic law is too Islamist and tramples on minority rights, including those of Christians who make up 10 percent of the population.


The build-up to Saturday’s vote was marred by deadly protests. Demonstrations erupted when Mursi awarded himself extra powers on November 22 and then fast-tracked the constitution through an assembly dominated by his Islamist allies.


However, the vote passed off calmly with long queues in Cairo and several other places, though unofficial tallies indicated turnout was around a third of the 26 million people eligible to vote this time. The vote was staggered because many judges needed to oversee polling staged a boycott in protest.


The opposition had said the vote should not have been held given the violent protests. Foreign governments are watching closely how the Islamists, long viewed warily in the West, handle themselves in power.


“It’s wrong to have a vote or referendum with the country in the state it is – blood and killings, and no security,” said Emad Sobhy, a voter who lives in Cairo. “Holding a referendum with the country as it is cannot give you a proper result.”


INCREASINGLY DIVIDED


As polls closed, Islamists attacked the offices of the newspaper of the liberal Wafd party, part of the opposition National Salvation Front coalition that pushed for a “no” vote.


“The referendum was 56.5 percent for the ‘yes’ vote,” a senior official in the Brotherhood’s Freedom and Justice Party operations room set up to monitor voting told Reuters.


The Brotherhood and its party had representatives at polling stations across the 10 areas, including Cairo, in this round. The official, who asked not to be identified, said the tally was based on counts from more than 99 percent of polling stations.


“The nation is increasingly divided and the pillars of state are swaying,” opposition politician Mohamed ElBaradei wrote on Twitter. “Poverty and illiteracy are fertile grounds for trading with religion. The level of awareness is rising fast.”


One opposition official also told Reuters the vote appeared to have gone in favor of Islamists who backed the constitution.


The opposition initially said its exit polls indicated the “no” camp would win comfortably, but officials changed tack during the night. One opposition official said in the early hours of Sunday that it would be “very close”.


A narrow loss could still hearten leftists, socialists, Christians and more liberal-minded Muslims who make up the disparate opposition, which has been beaten in two elections since Hosni Mubarak was overthrown last year.


They were drawn together to oppose what they saw as a power grab by Mursi as he pushed through the constitution. The National Salvation Front includes prominent figures such as ElBaradei, former Arab League chief Amr Moussa and firebrand leftist Hamdeen Sabahy.


If the constitution is approved, a parliamentary election will follow early next year.


DEADLY VIOLENCE


Analysts question whether the opposition group will keep together until the parliamentary election. The Islamist-dominated lower house of parliament elected earlier this year was dissolved based on a court order in June.


Violence in Cairo and other cities has plagued the run-up to the referendum. At least eight people were killed when rival camps clashed during demonstrations outside the presidential palace earlier this month.


In order to pass, the constitution must be approved by more than 50 percent of those casting ballots. There are 51 million eligible voters in the nation of 83 million.


Islamists have been counting on their disciplined ranks of supporters and on Egyptians desperate for an end to turmoil that has hammered the economy and sent Egypt’s pound to eight-year lows against the dollar.


The army deployed about 120,000 troops and 6,000 tanks and armored vehicles to protect polling stations and other government buildings. While the military backed Mubarak and his predecessors, it has not intervened in the present crisis.


(Additional reporting Yasmin Saleh and Marwa Awad; Writing by Edmund Blair and Giles Elgood; Editing by Tom Pfeiffer)


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Cisco hires bank to sell home wireless router unit: report






(Reuters) – Networking equipment company Cisco Systems Inc has hired Barclays to sell its Linksys home router unit, a report said on Sunday.


The business, which Cisco acquired for $ 500 million in 2003, will likely be valued for less because it has low margins, according to Bloomberg.






The sale is part of Cisco’s strategy to shed its consumer unit and focus on its software and technology services businesses.


Last year, Cisco axed its Flip camera business as part of this strategy.


(Reporting By Olivia Oran; Editing by Marguerita Choy)


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It’s OK to crank up the music, Florida Supreme Court rules






TALLAHASSEE, Florida (Reuters) – Motorist Richard Catalano‘s five-year quest to crank up Justin Timberlake tunes on his way to work won the blessing of the Florida Supreme Court on Thursday.


In a unanimous ruling, the state’s highest court affirmed a pair of lower-court opinions that a 2007 state law prohibiting loud music while driving violated the U.S. Constitution’s First Amendment, which guarantees freedom of expression.






Catalano received a $ 73 ticket in 2007 for violating the newly enacted law that prohibited motorists from playing music that is “plainly audible” 25 feet away. Motorists traveling by hospitals, schools and churches were subjected to even stricter standards.


Catalano, a Clearwater lawyer, challenged the law as subjective, arguing that determining whether music was too loud was in the ears of the beholder.


Further, the law provides listeners with fewer protections than drivers of vehicles emitting political or commercial speech, who have more explicit protections under the U.S. Constitution.


Calling the law overly broad, Justice Jorge Labarga wrote that noncommercial speech was also protected. Though rejecting the notion that the law was too vague, Labarga said the state showed no compelling interest in muzzling audiophiles who also prefer to feel their favorite music.


“The right to play music, including amplified music, in public fora is protected under the First Amendment,” Labarga wrote.


A message left with Catalano was not immediately returned Thursday.


(Editing by Jane Sutton; Editing by Will Dunham)


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Clinton sustains concussion; Benghazi testimony postponed






WASHINGTON (Reuters) – Secretary of State Hillary Clinton, who canceled an overseas trip last weekend because of illness, suffered a concussion after fainting due to dehydration, prompting the postponement of her scheduled congressional testimony on the attack on a U.S. mission in Libya, officials said on Saturday.


“While suffering from a stomach virus, Secretary Clinton became dehydrated and fainted, sustaining a concussion,” State Department spokesman Philippe Reines said in a statement.






“She has been recovering at home and will continue to be monitored regularly by her doctors,” Reines said, adding that she would work from home and stay in regular contact with other top officials.


Clinton, 65, fell ill with a stomach virus last weekend and was forced to cancel a planned trip to the Middle East and North Africa. The virus also hit other members of her staff, who were returning with her from a European trip, and was described as uncomfortable, but not medically serious.


Clinton’s doctors, Lisa Bardack of the Mt. Kisco Medical Group and Gigi El-Bayoumi of George Washington University, issued a statement saying that Clinton fainted as a result of “extreme dehydration” due to the virus.


“Over the course of this week we evaluated her and ultimately determined she had also sustained a concussion,” the doctors said in their statement, which was distributed by the State Department.


“We recommended that the secretary continue to rest and avoid any strenuous activity, and strongly advised her to cancel all work events for the coming week. We will continue to monitor her progress as she makes a full recovery.”


Clinton has often been cited as a potential Democratic candidate for the U.S. presidency in 2016 and frequently refers to her general good health. She said in an interview with ABC broadcast on Wednesday that she has “incredible stamina and energy.”


She has maintained a punishing schedule in her final weeks as the top U.S. diplomat, a position she intends to leave toward the end of January when U.S. President Barack Obama is sworn in for a second term.


Obama telephoned Clinton to wish her well, White House spokesman Tommy Vietor said.


BENGHAZI TESTIMONY NEXT WEEK


Clinton had been expected to testify on December 20 before the House of Representatives and Senate foreign affairs committees on a report on the deadly attack on the U.S. diplomatic post in Benghazi, Libya, in September that killed the U.S. ambassador and three other Americans and raised questions about security at far-flung posts.


Jodi Seth, a spokeswoman for Senate Foreign Relations Committee head John Kerry, said that given her condition, Clinton’s testimony would be postponed, but did not say until when. Seth said the planned hearings would be held with other senior officials appearing in Clinton’s place.


The Republican chair of the House of Representatives Foreign Affairs Committee, Ileana Ros-Lehtinen, issued a statement saying she was sorry to hear of Clinton’s ill health, but it was “unfortunate” she would be unable to testify before the committee next week.


“We still don’t have information from the Obama Administration on what went so tragically wrong in Benghazi that resulted in the deaths of four patriotic Americans,” Ros-Lehtinen said.


“We have been combing through classified and unclassified documents and have tough questions about State Department threat assessments and decision-making on Benghazi. This requires a public appearance by the Secretary of State herself.”


Ros-Lehtinen’s statement said William Burns and Thomas Nides, deputy secretaries of state, would provide testimony in Clinton’s place.


REPUBLICAN CRITICISM


Republicans have criticized the Democratic Obama administration for its early public explanations of the attack.


Much of the criticism focused on U.S. Ambassador to the United Nations Susan Rice, who on Thursday said she was withdrawing her name from consideration to replace Clinton as secretary of state to avoid a potentially disruptive confirmation process.


Clinton has appointed a special panel known as an accountability review board to assess both the Benghazi incident and the official response to it.


The board’s report, which will contain both classified and unclassified sections, is expected to be complete next week and Clinton has promised to be as transparent as possible with Congress in sharing its findings.


Clinton, whose husband, Bill Clinton, was president from 1993 to 2001 and who herself came tantalizingly close to winning the Democratic presidential nomination four years ago, has used her star power to promote U.S. interests around the world since Obama named her to lead the State Department in 2009.


She has consistently been rated as the most popular member of Obama’s Cabinet, leading to speculation she might mount another White House bid in 2016, although she herself has played down suggestions that she still hopes to become president.


“I’ve said I really don’t believe that that’s something I will do again. I am so grateful I had the experience of doing it before,” Clinton told ABC’s Barbara Walters in the interview broadcast on Wednesday.


“I just want to see what else is out there. I’ve been doing … this incredibly important and … satisfying work here in Washington, as I say, for 20 years. I want to get out and spend some time looking at what else I can do to contribute.”


(Reporting by Andrew Quinn and Lisa Lambert; Editing by Will Dunham, David Brunnstrom and Mohammad Zargham)


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Japan votes in election seen returning LDP to power






TOKYO (Reuters) – Japan voted on Sunday in an election expected to return the conservative Liberal Democratic Party (LDP) to power after a three-year hiatus, giving ex-Prime Minister Shinzo Abe a chance to push his hawkish security agenda and radical economic recipe.


Polls opened at 0700 a.m. (1700 ET) and will close at 8 p.m. (0600 ET), when major TV broadcasters will issue exit polls forecasting results.






An LDP win would usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear power energy policy despite last year’s Fukushima disaster and a potentially risky prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen.


Media surveys have forecast the LDP will win a big majority in parliament’s powerful 480-seat lower house, just three years after a devastating defeat that ended more than 50 years of almost non-stop rule by the business-friendly party. However, many voters remained undecided just days before the vote, the polls showed.


Together with a small ally, Abe’s LDP could even gain the two-thirds majority needed to break through a policy deadlock that has plagued successive governments for half a decade.


Abe, 58, who quit abruptly as premier in 2007 after a troubled year in office, has been talking tough in a row with China over uninhabited isles in the East China Sea, although some experts say he may temper his hard line with pragmatism once in office.


The soft-spoken grandson of a prime minister, who would become Japan’s seventh premier in six years, Abe also wants to loosen the limits of a 1947 pacifist constitution on the military, so Japan can play a bigger global security role.


The LDP, which promoted atomic energy during its decades-long reign, is expected to be friendly to nuclear utilities, although deep public safety concerns remain a barrier to business as usual for the industry.


ECONOMY IN DOLDRUMS


Abe has called for “unlimited” monetary easing and big spending on public works – for decades a centerpiece of the LDP’s policies and criticized by many as wasteful pork barrel – to rescue the economy from its fourth recession since 2000.


Many economists say that prescription for “Abenomics” could create temporary growth and enable the government to go ahead with a planned initial sales tax rise in 2014 to help curb a public debt now twice the size of gross domestic product.


But it looks unlikely to cure deeper ills or spark sustainable growth, and risks triggering a market backlash if investors decide Japan has lost control of its finances.


Japan’s economy has been stuck in the doldrums for decades, its population ageing fast and big corporate brands faltering, making “Japan Inc” a synonym for decline.


Consumer electronics firms such as Sony Corp are struggling with competition from foreign rivals and burdened by a strong yen, which makes their products cost more overseas.


Prime Minister Yoshihiko Noda‘s Democratic Party of Japan (DPJ) surged to power in a historic victory in 2009 promising to pay more heed to consumers than companies and put politicians, bureaucrats, in charge of policymaking.


Many voters now feel the DPJ pledges were honored in the breach as the novice party struggled to govern and to cope with last year’s huge earthquake, tsunami and nuclear disaster and then pushed through an unpopular sales tax increase with LDP help.


Voter distaste for both major parties has spawned a clutch of new parties including the right-leaning Japan Restoration Party founded by popular Osaka Mayor Toru Hashimoto.


Surveys show the DPJ, hit by a stream of defections, is likely to win fewer than 100 seats, less than a third of its tally in 2009.


(Additional reporting by Leika Kihara, Editing by Raju Gopalakrishnan)


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Nigeria governor, 5 others die in helicopter crash






LAGOS, Nigeria (AP) — A navy helicopter crashed Saturday in the country’s oil-rich southern delta, killing a state governor and five other people, in the latest air disaster to hit Africa’s most populous nation, officials said.


Nigeria‘s ruling party said in a statement that the governor of the central Nigerian state of Kaduna, Patrick Yakowa, died in the helicopter crash in Bayelsa state in the Niger Delta. The People’s Democratic Party’s statement described Yakowa’s death as a “colossal loss.”






The statement said the former national security adviser, General Andrew Azazi, also died in the crash. Azazi was fired in June amid growing sectarian violence in Nigeria, but maintained close ties with the government.


Yushau Shuaib, a spokesman for Nigeria’s National Emergency Management Agency, said four other bodies had been found, but he could not immediately give their identities.


The crash occurred at about 3:30 p.m. after the navy helicopter took off from the village of Okoroba in Bayelsa state where officials had gathered to attend the burial of the father of a presidential aide, said Commodore Kabir Aliyu. He said that the helicopter was headed for Nigeria’s oil capital of Port Harcourt when it crashed in the Nembe area of Bayelsa state.


Aviation disasters remain common in Nigeria, despite efforts in recent years to improve air safety.


In October, a plane made a crash landing in central Nigeria. A state governor and five others sustained injuries but survived.


In June, a Dana Air MD-83 passenger plane crashed into a neighborhood in the commercial capital of Lagos, killing 153 people onboard and at least 10 people on the ground. It was Nigeria’s worst air crash in nearly two decades.


In March, a police helicopter carrying a high-ranking police official crashed in the central Nigerian city of Jos, killing four people.


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Ten Commandments join Isaac Newton’s notes online






LONDON (Reuters) – A copy of The Ten Commandments dating back two millennia and the earliest written Gaelic are just two of a number of incredibly rare manuscripts now freely available online to the world as part of a Cambridge University digital project.


The Nash Papyrus — one of the oldest known manuscripts containing text from the Hebrew Bible — has become one of the latest treasures of humanity to join Isaac Newton‘s notebooks, the Nuremberg Chronicle and other rare texts as part of the Cambridge Digital Library, the university said on Wednesday.






Cambridge University Library preserves works of great importance to faith traditions and communities around the world,” University Librarian Anne Jarvis said in a statement.


“Because of their age and delicacy these manuscripts are seldom able to be viewed – and when they are displayed, we can only show one or two pages.”


Before the discovery of the Dead Sea Scrolls, the Nash Papyrus, was by far the oldest manuscript containing text from the Hebrew Bible and like most fragile historical documents, only available to select academics for scrutiny.


The university’s digital library is making 25,000 new images, including an ancient copy of the New Testament, available on its website (http://cudl.lib.cam.ac.uk/), which has already attracted tens of millions of hits since the project was launched in December 2011.


The latest release also includes important texts from Judaism, Christianity, Islam, Buddhism, Hinduism and Jainism.


In addition to religious texts, internet users can also view the 10th century Book of Deer, which is widely believed to be the oldest surviving Scottish manuscript and contains the earliest known examples of written Gaelic.


“Now… anyone with a connection to the Internet can select a work of interest, turn to any page of the manuscript, and explore it in extraordinary detail,” Jarvis said.


The technical infrastructure required to get these texts to web was in part funded by a 1.5 million pound ($ 2.4 million) gift from the Polonsky Foundation in June 2010.


($ 1 = 0.6210 British pounds)


(Reporting by Dasha Afanasieva, editing by Paul Casciato)


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Roll Up! “Magical Mystery Tour” gets U.S. TV debut






LOS ANGELES (Reuters) – Give four pop stars turned hippies a movie camera in 1967 and what do you get? The Beatles‘ “Magical Mystery Tour” film, which will receive its long-awaited U.S. broadcast television debut on Friday on PBS.


Long a curiosity in the United States, the film will be accompanied by a new documentary about its making. A restored version was released on DVD and blu-ray in October.






The third film for The Fab Four, after a “A Hard Day’s Night” in 1964 and “Help!” a year later, “Magical Mystery Tour” is a shambolic trip through the English countryside on a bus filled with odd characters, but thin on plot. It first aired on BBC television the day after Christmas 1967.


Although it was initially panned by British critics, time has delivered some justice to the project, Jonathan Clyde, the producer of the documentary, told Reuters.


“‘Magical Mystery Tour‘ has always been the black sheep of the Beatles family, but I think it’s been rehabilitated into the Beatles canon,” Clyde said. “It’s no longer the ‘mad uncle in the attic’ that nobody wants to talk about. It’s been let out.”


In the United States, little was known about the film at the time of its release.


Beatles fans only had the album of music, or saw a poor print of the film in a double-feature midnight showing with “Reefer Madness,” a 1936 anti-marijuana propaganda film often screened decades later for comedic effect.


“I first saw it in 1974 at a university,” Bill King, the longtime publisher of Beatles fanzine Beatlefan, said of “Magical Mystery Tour.” “By then, though, it had taken on mythic status. I loved it.”


At the time of its making, The Beatles were arguably at their creative peak on the heels of a seminal album, “Sgt. Pepper’s Lonely Hearts Club Band,” and their summer of love anthem “All You Need Is Love,” which debuted on global TV.


SCRIPT WANTED


But even before “Sgt. Pepper’s” release in June 1967, Paul McCartney had already conceived of the film project. The only thing he was missing: a script.


“Paul had drawn out a pie chart,” said Clyde, also a longtime consultant for The Beatles‘ company, Apple Corps. “It just said things like ‘Get on coach,’ ‘Dreams,’ ‘End Song.’ They really had no idea what it was going to be like.”


The group hired a bus, a film crew, and a handful of extras and set out around England, creating scenes with everything from magicians to Ringo Starr’s oversized Aunt Jessie being stuffed with spaghetti by waiter John Lennon.


McCartney did most of the directing.


“It really had something for everyone, which is something I like about it,” Clyde said. “It was really a nod not only to the younger people watching, but to their parents’ generation, as well.”


The film also was loaded with six new Beatles songs, presented as what now would be considered music videos.


The music itself, including songs “I Am the Walrus” and “The Fool on the Hill,” was as innovative as any of the band’s music that year – and mostly recorded just before filming started.


The Beatles were driven and inspired by having a deadline,” said Giles Martin, son of Beatles producer George Martin. The younger Martin remixed the songs at the legendary Abbey Road studios for the DVD and broadcast.


“And songs like ‘Walrus’ are a brilliant mix of both The Beatles as a rock and roll band and as masters of groundbreaking experimental recording,” Martin added.


(Editing by Eric Kelsey and Nick Zieminski)


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Lundbeck’s alcohol dependency drug wins EU green light






LONDON (Reuters) – A novel drug to fight alcohol dependency was given a green light by European regulators on Friday, providing a boost to Danish drugmaker Lundbeck at a time when its top product faces a big drop in sales.


The European Medicines Agency (EMA) said on Friday it recommended approval of Selincro in conjunction with counseling for the reduction of alcohol consumption in adults dependent on drink.






Recommendations from the EMA are normally endorsed by the European Commission within two or three months, implying the drug could be launched in Europe early next year.


That is good news for Lundbeck, which needs new drugs to replace lost sales from antidepressant Cipralex, sold as Lexapro in the United States and Japan, which is now coming off patent.


Alcohol abuse is theoretically a vast market, although it is unclear whether doctors will be ready to prescribe a drug as a treatment and whether Lundbeck has the marketing muscle to make a big impact.


Lundbeck Chief Executive Ulf Wiinberg told Reuters last week that Selincro was “a bit of a joker in our portfolio” because of uncertainty as to how it will be used in practice.


The drug, which blocks the action of opioid receptors in the brain, was licensed to Lundbeck from Finland’s Biotie Therapies and shares in Biotie jumped as much as 16 percent on the news, while Lundbeck rose around 1 percent.


“Clearly, the news is a much-needed boost to sentiment for the (Lundbeck) shares,” said Deutsche Bank analyst Tim Race.


“However, we suspect the market will refrain from pricing-in significant upside from the drug given uncertainties in reimbursement and Lundbeck’s ability to penetrate this market without a major partner.”


Race said current consensus forecasts suggested modest sales of 540 million Danish crowns ($ 95 million) in 2016.


More important for Lundbeck will be the verdict from regulators in North America and Europe late next year on a new antidepressant being developed with Japanese partner Takeda Pharmaceutical that analysts see as a potential $ 1-2 billion-a-year seller.


Developing new treatments for depression has proved an uphill battle for drugmakers in recent times but vortioxetine has produced encouraging clinical trial results and its unique mode of action and flexible dosing could make it a winner.


Another approval prospect for next year is Abilify Maintena, a once-monthly version of schizophrenia drug Abilify that Lundbeck is working on with Otsuka.


Further out, Lundbeck is also developing a drug for the symptoms of Alzheimer’s that will be ready to go into final-stage clinical testing next year and could be partnered with a larger drug company.


(Reporting by Ben Hirschler; Editing by Chris Wickham and Mark Potter)


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Deeper eurozone union ‘agreed’







EU leaders have agreed on a roadmap for eurozone integration beyond the deal on centralised banking supervision, German Chancellor Angela Merkel said.






Specific dates have not yet been agreed for the phases of integration.


But the EU summit chairman, Herman Van Rompuy, said a deal should be reached next year on a joint resolution scheme for winding up failed banks.


Mr Van Rompuy’s far-reaching roadmap was the main topic of the two-day Brussels summit.


Speaking after the summit talks, French President Francois Hollande said: “There is no doubt today about the integrity of the eurozone – Europe cannot now be taken by surprise.”


But beyond the banking reforms, he said, Europe must address the problems of unemployment and feeble growth.


The deal to make the European Central Bank (ECB) the chief regulator should pave the way for direct recapitalisation of struggling eurozone banks by the main bailout fund, the 500bn-euro (£406bn; $ 654bn) European Stability Mechanism (ESM).


Spain is especially anxious to get that help for its debt-laden banks.


Direct recapitalisation would help break the “vicious circle” in which bank debts have put a crippling burden on national budgets and led to massive taxpayer-funded bailouts.


However, Germany insists that the ESM should not be used to write off the existing “legacy” debts that have burdened Spain, Greece and the Republic of Ireland. Any ESM loans will be accompanied by tough rules on budget discipline.


June deadline


Continue reading the main story

Eurozone integration – next steps


  • ECB takes charge of bank supervision no later than March 2014

  • Joint scheme to wind down broken banks, planned for launch in mid-2014

  • Joint deposit guarantee scheme, to prevent bank runs

  • Main bailout fund – ESM – gets power to recapitalise banks, under strict conditions

  • More centralised economic governance, including enforceable “contracts” between governments and EU Commission

  • Tighter co-ordination of national budget targets


At a late-night news conference, Mrs Merkel said “we agreed a roadmap for the future development of the currency union and talked about different aspects of this that are important.


“Above all, it was important to define when we do what.”


Mr Van Rompuy aims to present detailed plans for deeper economic integration in time for the June 2013 EU summit. They would include “mutually agreed contracts for competitiveness and growth between governments and EU institutions”.


Much closer EU scrutiny of national budgets is envisaged, including penalties if governments rack up unsustainable debts.


Contractual agreements on things such as taxation and labour market policy are likely to require changes to the EU treaties – so these are likely to be put off until after the European elections in mid-2014.


The UK, along with Denmark, has a formal opt-out from joining the euro, and will not be part of the new banking union. But the UK’s banking pre-eminence in Europe means it is taking an intense interest in the negotiations.


UK ‘at heart’ of EU


At a news conference after the summit, UK Prime Minister David Cameron said a “multi-faceted” Europe, with countries going at different speeds, did not leave the UK in an uncomfortable position.


Continue reading the main story

Eurozone banking deal


  • ECB to act as chief supervisor of eurozone banks and lenders

  • ECB to co-operate closely with national supervisory authorities

  • Direct oversight of banks with assets greater than 30bn euros ($ 39bn; £24bn) or with 20% of national GDP

  • National supervisors to remain in charge of other tasks

  • Non-eurozone countries that wish to take part can make close co-operation arrangements


He stressed that the UK had been “at the heart of decision making” on important issues like sanctions and EU enlargement, and “we wrote the rules of the single market and benefit from it today”.


He said the eurozone countries were committed to protecting the euro, but deeper integration involved big sovereignty issues. “I personally believe Britain won’t ever join, certainly not while I’m prime minister,” he said.


Referring to the EU’s crisis response, he said that “as this plays out it’s changing the European Union… so I believe there are opportunities for others, like Britain, to make changes themselves”.


‘Good example’


New rules on prudent banking are seen as vital to bolster the euro, as bank failures triggered the financial crash.


Under the deal expected to take effect in March 2014, banks with more than 30bn euros ($ 39bn; £24bn) in assets will be placed under ECB oversight.


The ECB would also be able to intervene with smaller lenders and borrowers at the first sign of trouble.


Speaking after the summit, Mr Hollande said Europe had been unprepared for the financial crisis but now had a “crisis management authority” which allowed for the “return of confidence and growth”.


The agreement on a financial transactions tax was, he told reporters, a good example of how countries could be brought into eurozone integration through closer co-operation, signing up to agreements at a later stage.


A non-eurozone country, Lithuania, joined the group adopting a financial transaction tax.


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