Euro-zone leaders will not be able to hammer out a system to contain Europe’s spreading debt crisis in time for a much-awaited summit on October 23. Any comprehensive solution to shore-up the continents’ crumbling finances will instead have to wait until Wednesday at the earliest, an unidentified German official told the Financial Times. Stalling progress is a fundamental disagreement between France’s president Nicolas Sarkozy and Germany’s Chancellor Angela Merkel on how to increase the resources and power of the European Financial Stability Facility to enable it to tackle the existing threats to Europe’s banks and southern Europe’s bond markets. The impasse comes as alarm bells have been sounding off all over the euro-zone this week, with Moody’s Investors Service cutting Spain’s credit rating for the third time since 2010 on Wednesday, Germany lowering its growth forecasts for 2012 on Thursday, and Italy flip-flopping on the nomination of its next central bank chief in a messy saga that’s unnerved the markets.
Euro-zone rescue talks stall
Franco-German disagreement behind the impasse
FILED UNDER: Europe