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

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu 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.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid