German Chancellor Angela Merkel in the final week of her presidency claimed that the new European Treaty saved the bloc from an internal split, according to a story on Dow Jones news, and she also wants the treaty ratified before the end of 2009. Dutch and French voters said no to the original re-drafted treaty in referendums two years ago, and the new draft was designed to appease some of those sensitivities.
According to the story the new treaty relies on more decisions being taken by majority rather than unanimous votes, which reduces the threat of national vetoes delaying E.U. policy. The new voting rules will only come into effect in 2014 at the earliest due to horse-trading with Poland.
Merkel was quoted as saying that while failure to reach agreement "would have not been the end of Europe as we know it, it would have had serious consequences." Spot traders have not focused too much on the comments, however the fact that Merkel highlighted the seriousness of the treaty discussions does not seem to have been lost on investors that focus on macro issues, as this remains a contentious issue, and one that highlights the rifts between the "haves and have nots" in the European Community.
EUR/USD has slipped back toward the lows of the day, last trading at 1.3435, having stopped just short of the New York session's 1.3429 low. German CPI data is due up at 12.00 PM, expected to come in around 1.9% y-on-y according to IFR and the market.
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