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Eurozone leaders to hold emergency summit on Thursday

Other News Materials 15 July 2011 23:16
Eurozone leaders have been invited to a snap summit in Brussels on Thursday to discuss "the financial stability of the euro area" and a second international bailout for Greece, European Union president Herman Van Rompuy announced Friday
Eurozone leaders to hold emergency summit on Thursday

Eurozone leaders have been invited to a snap summit in Brussels on Thursday to discuss "the financial stability of the euro area" and a second international bailout for Greece, European Union president Herman Van Rompuy announced Friday, dpa reported.

The crisis talks will follow wrangling over the Greek rescue package and market instability that led Europe's common currency to fall below 1.40 dollars for the first time in four months earlier this week. The euro was back at 1.4154 dollars on Friday evening.

Greece received a 110-billion-euro (155-billion-dollar) bailout from the EU and the International Monetary Fund (IMF) last year, but is now said to need a new aid package of a similar magnitude to remain solvent beyond 2012.

Eurozone leaders could theoretically finalize the package during the summit.

Decisions have so far been delayed by German, Dutch and Finnish insistence that private lenders should pay for at least some of the new Greek package.

Policymakers have struggled to find a way to meet that request without triggering investors' panic. Eurozone governments are now considering allowing Greece to default, albeit for a short time, but the European Central Bank is resolutely opposed to the plan.

Other suggestions have included the eurozone's bailout fund, the European Financial Stability Fund, lending Greece money to help it buy back some of its debt at reduced prices or directly buying up Greek debt from banks.

The inability to find common ground even affected the scheduling of the special summit, initially expected to take place on Friday.

Meanwhile, markets have reacted by demanding higher risk premiums on Italian and Spanish debt, raising the spectre of the eurozone crisis spreading to those two countries, and further increasing the pressure on EU leaders to find a solution for Greece.

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