Leaders of eight centre-right-led governments in the EU have backed calls for a competitiveness pact to improve the economic performance of the eurozone.

At a meeting of the European People’s Party (EPP) in Helsinki yesterday (4 March), they also said they were open to revising the terms of Ireland’s €85 billion bail-out, but expressed caution about changes to the eurozone’s €440bn rescue fund.

The meeting was called to discuss measures to improve the stability of the eurozone in response to last year’s sovereign-debt crises. 

Wilfried Martens, the EPP president, said that the party had approved a five-point plan to “bolster economic growth”.

“With the right structural reforms and with fiscal consolidation, we can improve our competitiveness and create new jobs,” he said.

The meeting, which was also attended by the presidents of the European Council and the European Commission, agreed to support a pact for competitiveness that would require member states to implement structural reforms and consolidate their public finances.

The pact was originally proposed in February by Angela Merkel, Germany’s chancellor, and Nicolas Sarkozy, France’s president. It initially met opposition from other eurozone leaders because it included politically controversial ideas, such as scrapping wage indexation.

EPP leaders said that steps undertaken as part of the pact should be monitored by the European Commission and that there should be procedures for dealing with countries that did not achieve the desired progress in improving competitiveness.

The pact is part of a number of measures to be agreed by leaders of all 27 member states of the EU at a summit on 24-25 March. The measures include changes to the temporary eurozone rescue fund, the European Financial Stability Facility (EFSF), and details of a permanent fund, the European Stability Mechanism, which will start operating in 2013. The pact will also be discussed at a summit of eurozone leaders in Brussels on 11 March.

EPP leaders agreed that there should be changes to the EFSF “to ensure its effectiveness, if needed”. Although the EFSF has a lending capacity of €440bn, it can only use around €250bn because of the need to keep a cash reserve to maintain its triple-A credit rating. The European Commission wants to increase the EFSF’s lending capacity but some countries are reluctant to provide the additional funds and guarantees that would be needed. They argue that improvements in market conditions and structural reforms have reduced the need to increase the EFSF’s lending capacity in the near future.

Enda Kenny, the prime minister-designate of Ireland, attended the meeting in Helsinki to discuss a possible negotiation of the terms of Ireland’s €22.5bn loan from eurozone countries. EPP leaders indicated they were open to changing the terms of the bail-outs for Ireland and Greece, saying: “We recognise that measures taken as part of consolidation plans need certain adjustments at national levels.” They agreed there should be a “periodical re-evaluation of EU and international assistance, which may lead to possible amendments of the packages in place”. They stressed that this could be done if the countries reached “agreed benchmarks”.

Martens also challenged centre-left leaders to sign up to the EPP’s plans.

At a meeting in Athens on 3 March, Socialist leaders agreed their own programme for restoring growth. They approved a declaration rejecting proposals for a competitiveness pact, saying they were “driven by a desire to institutionalise austerity and to dilute our social models and our welfare systems”.