Document: Eurozone eyes 0.5 pct deficit limit

Document: Eurozone aims for debt brakes limiting deficit at 0.5 pct of GDP

Associated Press
New treaty to save euro splits European Union
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German Chancellor Angela Merkel arrives for an EU summit in Brussels …

BRUSSELS (AP) -- Draft conclusions for a crucial summit of European Union leaders say that eurozone states should adopt a debt brake that would limit annual deficits at 0.5 percent of economic output.

The draft statement, which was seen by The Associated Press, says that structural deficits can only exceed a 0.5 percent limit in exceptional circumstances or to counteract a recession.

The limit is stricter than the 3 percent deficit rule currently prescribed by EU law, although the 3 percent also include debt repayments.

EU leaders were still wrangling over the text Thursday evening and final conclusions were not expected before Friday.

The text also sets out a way of increasing the firepower of the eurozone's permanent bailout fund above €500 billion ($670 billion), which is still being opposed by powerful Germany.

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