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EU summit focuses on growth

EU leaders are now finally focusing on growth rather than austerity, at the lastest summit of all 27 EU countries. Britain and France disagreed on how growth can be achieved, with France still proposing a financial transaction tax, to help pay for growth.

This was the first summit in 2 years that did not have Greece as the main focus of discussion. The summit began on Friday, after the EU with the exception of the UK and Czech Republic voted for a new fiscalcompact treaty.

The benefits of the deal should be realized in 7-10 years. In the short term austerity will bite especially for countries not in the coreof the EU, like Portugal, Ireland and Greece. The Greek deal is a crucial short term measure to prevent default on its massive debts.Greek bond swap did not trigger a credit event,so noinsurance willbe paid on the credit default swaps,CDS.

The deal which will see 43% go to bailed out banks and bondholders with the remaining 57% to Greece, swapped shorter maturity bonds for longer term ones. The dealis being voted on by the 17 Eurozone member countries.

The Dutch and Finns were the latest parliaments in the Eurozone to approve the Greek bailout package, following Germany which ratified the package yesterday. The move came amidst the ECB passing out 529 Billion pounds of credit to European banks in its Long term repayment operation (LTRO) loan program.

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