News / Europe

European Leaders Reach 'Broad Agreement' On Finances

Luxembourg's Prime Minister Jean-Claude Juncker (L), France's President Nicolas Sarkozy (C) and Germany's Chancellor Angela Merkel (R) attend an European Union summit in Brussels, October 26, 2011.
Luxembourg's Prime Minister Jean-Claude Juncker (L), France's President Nicolas Sarkozy (C) and Germany's Chancellor Angela Merkel (R) attend an European Union summit in Brussels, October 26, 2011.

European leaders meeting at the second emergency summit in Brussels this week announced an agreement to force banks to sharply increase their capital requirements so they can absorb expected losses on holdings of Greek debt. Leaders say it's an important first step in a larger plan to restore financial stability in the region.  But while the broad outlines of a comprehensive debt relief plan are starting to emerge, the details remain sketchy.  

Under intense pressure to reach an accord aimed at resolving the two year old debt crisis - European leaders agreed on a plan Wednesday to force banks to boost their capital ratios to make sure they can deal with future emergencies.

Lithuanian president Dalia Grybauskaite called it a major breakthrough for the 27 member countries of the European Union.  But she says now the work begins.

"Of course the main thing now is restructuring all the banking sector, to stabilize and to give the guarantees that we are all behind it. So the Greek package will be renegotiated now and to go to the banking sector and representatives of banks.  But we 27 give green light for negotiations to be finalized.  And now it's all about technicalities," she said.

One of the technicalities involves the amount of Greek debt European banks are willing to write off.  
European leaders want banks to take as much as a 60 percent loss, nearly three times the amount they agreed to in July.

Although England is not one of the 17 countries that use the euro, British Prime Minister David Cameron says the developments are crucial to the success of the entire continent.

"It's very much in Britain's interest that we sort out these problems and solve this crisis. We made good progress on the bank recapitalization. That wasn't watered down, it's now been agreed. It will only go ahead when the other parts of a full package go ahead and further progress on that needs to happen tonight (October 26, 2011)," he said.

German chancellor Angela Merkel, who won a mandate from German lawmakers to boost the size of the eurozone rescue fund, said it was crucial for the region to act as one.

"Germany can't do well if Europe doesn't. That's why the most important goal for the government must be that Europe emerges stronger from the crisis. This means Europe must become a Stability Union," she said.

Financial markets had anticipated more progress in Brussels this week.  

Michael Hewson, a market analyst for CMC markets in London, said "We're not going to get a quick resolution, the market's going to have to suck it up."

While the immediate focus of the Brussels meetings have been on efforts by Greece to reduce its massive debt; Italy, Europe's third largest economy is also under pressure to adopt economic reforms to stave off the possibility that it could become the fourth eurozone country to need a bailout.

You May Like

UN Ambassador Power Highlights Plight of Women Prisoners

She launches the 'Free the 20' campaign, aimed at profiling women being deprived of their freedom around the world More

Satellite Launch Sparks Spectacular Light Show

A slight delay in a satellite launch lit up the Florida sky early this morning More

Fleeing IS Killings in Syria, Family Reaches Bavaria

Exhausted, scared and under-nourished, Khalil and Maha's tale mirrors those of thousands of refugees from war-torn countries who have left their homes in the hopes of finding a better life More

This forum has been closed.
Comments
     
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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs