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Tuesday, January 31, 2012

Europe signs up to German-led fiscal pact

Chancellor Angela Merkel cemented her political ascendancy in Europe Monday when 25 out of 27 EU states agreed to a German-inspired pact for stricter budget discipline, even as they struggled to rekindle growth from the ashes of austerity.

Only Britain and the Czech Republic refused to sign a fiscal compact in March that will impose quasi-automatic sanctions on countries that breach European Union budget deficit limits and will enshrine balanced budget rules in national law.

The accord was eagerly greeted by the European Central Bank which has long pressed euro zone governments to put their houses in order.

"It is the first step toward a fiscal union. Read More