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

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license 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.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
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 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.

All About America

AppleAndroid