“It is looking as if the July 21 agreement just isn’t sufficient and that’s been increasingly recognized in Greece and the rest of Europe,” Julian Callow, chief European economist at Barclays Capital in London, said yesterday on Bloomberg Television’s On the Move with Francine Lacqua.
Merkel and French President Nicolas Sarkozy put bank recapitalization at the top of the priority list in an Oct. 9 declaration in Berlin that triggered a flurry of consultations in European capitals.
The German and French leaders each called for a “lasting” solution to the 19-month crisis, echoing language the EU used in March when it unwrapped what it labeled a “comprehensive” package to restore economic order.
Upgraded Strategy
The upgraded strategy hinges on finding a way to get more out of the 440 billion-euro ($602 billion) rescue fund.
“Further elements are needed to address the situation in Greece, the bank recapitalization and the enhanced efficiency of stabilization tools,” EU President Herman Van Rompuy said in setting the new summit date yesterday.
The summit, now slated for a Sunday when the U.S. and European markets are closed, will be preceded by a meeting of finance ministers on a date to be determined. Europe has traditionally chosen weekends for market-sensitive crisis management, as when the euro area created the rescue fund in May 2010.
A planned reinforcement of the fund, known as the European Financial Stability Facility, faces its sternest test today with a vote in Slovakia’s parliament. One party in the governing coalition is holding out against approval.
Political jousting in Slovakia, a euro user since 2009, showed how Europe’s unanimous decision-making principle makes the emergency response hostage to local politics.For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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