EU summit comes to a close

President Francois Hollande delivered a message of hope to reporters in Brussels at the end of the two-day summit, where two of the biggest decisions for the eurozone were reached this year: an agreement to launch an EU banking supervisory entity and the release of more financial aid to Greece. Those steps "have allowed us to close one chapter and begin a new one," he said.

"No one is asking the question today that was on everyone's minds for months: is a European country going to leave the eurozone? This question has found its answer," Hollande told the press on Friday.

But German Chancellor Angela Merkel, who has dominated cooperative efforts to curb the effects of the debt crisis in southern eurozone countries, expressed a note of caution despite the recent progress.

"One reason I am careful with my forecasts is the adjustment process, the changes that we are going through are very difficult and painful," Merkel said.

"Next year, and the ECB president said this, we will have very low growth rates, we will see negative growth in some countries, and we can expect very high unemployment levels to continue," Merkel said.

While the German leader remained conservative in her predictions of the future of the 17-member bloc, she did praise her colleagues' decisions to give Greece more aid and the European Central Bank (ECB) supervisory powers.

The two-day conference was the last summit for European Union leaders before 2013.

Overnight talks end with agreement

In the early morning hours on Friday, EU leaders in Brussels announced that they had agreed to pursue steps to form a banking supervisor to oversee the eurozone's largest financial institutions and to intervene in struggling smaller banks.

Upon approval by the European Parliament, the ECB would assume the supervisory role over Europe's largest banks beginning in March 2013. Its range would widen to 6,000 banks by January 2014.

Such an achievement would be one of the EU's biggest since the debt crisis began. It could also help to curb the "doom loop" between debt-ridden banks and destabilized governments.

The announcement followed another important decision the day before, when EU finance ministers agreed to release the next tranche of aid to Greece worth 34 billion euros ($45 billion) this month. Greece would also receive an additional 15 billion euros during the first quarter of 2013, they said.

The next tranche is to come from the EU rescue fund, the ESM. EU finance ministers and Greek leaders hope the aid can help reduce the crisis-stricken country's debt to 124 percent of its GDP over the next decade.

EU finance ministers approved the aid package after Athens reduced its debt by 20 billion euros this fall, estimated worth about 40 billion euros at face value.

kms/hc (dpa, AFP, Reuters)