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

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs