Portugal’s prime minister has resigned on the eve of a European Union summit that is supposed to move towards a “grand bargain” to bolster the eurozone and strengthen its crisis prevention ability. The currency bloc is in a bind. Lex’s Edward Hadas and Vincent Boland discuss just how bad it is and what might come next.
The Liberal Democrats chose the elegant Palais D’Egmont for their pre-summit gathering. While the leafy grounds are gorgeous – particularly on a very un-Belgian sunny day – the mood was anxious.
Until Portugal imploded, most of the focus of the two-day summit was expexted to be on the new Irish prime minister Enda Kenny, who failed to secure a cut in Dublin’s bail-out loans during an emegency gathering two weeks ago.
The pre-summit caucuses of leaders in their party groupings have begun, and one of the surprise guests at the centre-right European Peoples’ Party meeting is Pedro Passos Coelho, the head of Portugal’s opposition Social Democrats and the country’s likely next prime minister.
As we’ve been reporting for the last couple of days, many of the fiscal measures that we once thought had been agreed for the two-day summit are unravelling, thanks in part to Finland’s objections to finalising an increase in the eurozone’s €440bn bail-out fund and Germany’s sudden objection to the structure of the €500bn fund that will replace it in 2013.
UPDATE: The demonstrations are already turning nasty. Near the Belgian prime minister’s office, protesters are throwing rocks at riot police, who have opened water cannons on them.
It’s summit day (again!) in Brussels, and for Europe’s presidents and prime minsters gathering this afternoon, the unexpected collapse of the Portuguese government and the ongoing infighting over the Libyan campaign is likely to dominate deliberations behind closed doors.
But those of us without the benefit of a security detail and Belgian motorcycle outriders will have to deal with something far more onerous: thousands of Belgian demonstrators who are expected to clog Brussels’ city centre to protest European austerity measures and the failure of Belgian political leaders to form a government.
A quick morning wander through the city’s EU quarter reveals Belgian security forces armed to the teeth, complete with gas masks, body armour, riot helmets and plexiglass shields. Helicopters buzz overhead. Two Belgian army soldiers were even spotted wandering through the atrium of Justis Lipsius, the EU building where the summit is held.