Austria says Eurozone deal lacks 'firepower'

A summit deal struck by all EU countries except Britain lacks the necessary "firepower" to tackle the underlying causes of the eurozone crisis, the Austrian chancellor said Saturday. "A firewall was created, but it is not strong or large enough to have a big deterrent effect on speculators and the financial markets in the coming years," Werner Faymann told the Salzburger Nachrichten daily in an interview. "The decisions taken lack the necessary firepower to have a sustained effect." He said that an agreement in Brussels on Friday on tighter budget discipline was a "large step on the path towards more independence from financial markets and (sovereign bond) creditors." But he added: "What is missing are financial market regulations, a European rating agency (and) European revenues from financial markets through a tax on financial transactions." The summit ended with 26 of the 27 member states signalling their willingness to join a "new fiscal compact" after Britain vetoed having tough new budget rules enshrined in a modified EU treaty, as pushed by Germany and France. Faymann said that British Prime Minister David Cameron's negotiating tactics at the summit "were in blatant contradiction to the spirit, and the team spirit, of the European Union." The pact, due to be finalised in March, includes plans to impose near-automatic sanctions on countries running excessive deficits and gives Brussels greater powers overseeing national budgets. Leaders hope the pact will convince the European Central Bank to drop its reluctance to use its full arsenal against the crisis, with the Frankfurt institution seen as the beleaguered eurozone's best hope. The 17 eurozone countries signed up to the pact while nine other non-euro EU nations "indicated the possibility to take part in this process" after consulting their parliaments, EU leaders said in a statement. Hungary had originally voiced reluctance, while Sweden and the Czech Republic were undecided.