News / Europe

European Finance Chiefs Meet on Debt Crisis

(L-R) Luxembourg's Prime Minister and Eurogroup chairman Jean-Claude Juncker, IMF Managing Director Christine Lagarde, Germany's Deputy Finance Minister Joerg Asmussen and Finance Minister Wolfgang Schaeuble talk at the start of an eurozone finance minist
(L-R) Luxembourg's Prime Minister and Eurogroup chairman Jean-Claude Juncker, IMF Managing Director Christine Lagarde, Germany's Deputy Finance Minister Joerg Asmussen and Finance Minister Wolfgang Schaeuble talk at the start of an eurozone finance minist
Henry Ridgwell

European leaders converge on Brussels Sunday for a crucial summit aimed at forging a plan to save the euro currency. As Greece struggles to avoid a default on its debts, EU leaders must try to stop the crisis from spreading to much bigger economies like Italy and Spain, which could threaten the future of the European Union itself.

Two days of violent protests and strikes preceded Greece's latest effort to slash government spending.  Defying the protesters, Prime Minister Papandreou succeeded in getting the latest round of austerity measures passed in Parliament, vital to secure the next slice of European and IMF bailout money.

That will give encouragement to European leaders. After months of turmoil and credit downgrades, Sunday's summit is billed as the moment Europe must finally come together to stem the tide of its debt crisis. German Chancellor Angela Merkel struck an upbeat tone ahead of the meeting.

"If we want to use the crisis as an opportunity," Merkel said, "if we are determined to have more Europe, then we must seize the crisis as an opportunity and be prepared for unconventional and quicker action."

Few leaders appear confident of a quick agreement; a second summit has already been penciled in for Wednesday next week.  By then, France and Germany say they will have bridged their differences on how Europe's bailout fund should be strengthened.

Analysts say the initial focus will be on how to pump more capital into troubled banks. And that's just the start.

Europe needs to show it will bail out bigger countries like Italy and Spain if they caught in a debt spiral, says Tobias Blattner of Daiwa Capital Markets.

"They need to increase the firepower of the bailout fund so that we finally stop contagion and there are no worries about an eventual Italian default," said Blattner.  "This is what they have to do. But unfortunately how it looks now is that the proposals, how they want to leverage this temporary bailout fund, will not be enough. And this is why the summit will most likely disappoint financial market participants."

Tim Ohlenburg of London analyst group the Center for Economic and Business Research says more radical measures are needed for investors to regain confidence in Europe.

"We think there's hope for the eurozone in the long term overall if Europe manages to put a new institutional framework in place and manages either to let go of economies that are not viable in the euro, or find a transfer mechanism," said Ohlenburg.

No eurozone leader dares to talk in public of weaker members dropping the currency. But the only alternative, says Olehnburg, is a truly federal Europe.

"I think the only way to put an end to this situation, in general, is treaty change," added Ohlenburg.  "More power to Europe, closer integration, fiscal union."

Such is the gravity of its debt crisis that Europe's very foundations are up for debate.

You May Like

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

Audio 'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book More

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Study: Insecticide Damaging Wild Bee Populationsi
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs