EU Leaders Sign Pact to Speed Bailout-Fund Payments

European Union leaders Friday signed a new fiscal pact for the bloc, providing for faster transfer of capital to the planned permanent bailout fund and setting strict rules on member states' debt.

Germany's Chancellor Angela Merkel said the agreement - signed by 25 of the EU's 27 members - is a milestone.

We are doing now for the first time what's necessary to ensure new growth in Europe, Merkel was quoted as saying by Dow Jones Newswires on her way into a morning meeting in Brussels of European heads of state and government.

The president of the EU's European Council, Herman Van Rompuy, said the pact will have a deep and long-lasting impact on policies and help prevent a repeat of the debt crisis now affecting the euro zone, Bloomberg News reported.

He urged EU leaders to move quickly to persuade national parliaments -- and voters -- to ratify the pact, the text of which was finalized in late January.

Any country that fails to ratify the treaty would be blocked off from euro zone bailout funds in spring 2013, Dow Jones Newswires noted.

The U.K. and Czech governments said they wouldn't sign the pact, forcing other leaders to agree to it as an intergovernmental agreement instead of as a change to EU law.

The EU plans to equip its permanent rescue fund, the European Stability Mechanism, or ESM, with €80 billion in cash and give it the right to call another €620 billion in an emergency. The total would enable it to lend €500 billion ($660 billion) and maintain a buffer to garner an AAA credit rating.

The euro weakened 0.3 percent to $1.3270 at 9:25 a.m. in Brussels while the Stoxx 600 Index added as much as 0.3 percent.

Finance ministers from Group of 20 countries made clear in February that they won't pour more money into the International Monetary Fund's anti-crisis resources until the 17-state euro zone does more to help itself.

The EU faces a March 13 deadline -- a day after the next meeting of euro zone finance ministers - to increase the rescue limit in order to win over the IMF, Luxembourg Prime Minister Jean-Claude Juncker said, according to Bloomberg News.