Europe's leaders agreed on Thursday to plans for a "fiscal facility" to help eurozone countries cope with shocks, opening the door to partial budgetary union.

The joint fund is to go far beyond crisis firefighting or enforcement of fiscal discipline on states in trouble. EU documents describe it as a fiscal buffer to offset the booms and busts caused by the EMU's one-size-fits-all interest rates, along the lines of America's system of fiscal transfers to depressed regions.

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