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European leaders still to agree on eurozone plan

European leaders have yet to agree on a broad plan to help Greece, support European banks and bolster the euro. Originally they were supposed to announce a comprehensive solution to the debt crisis during the session being held later today, Wednesday, October 26, in Brussels, the TASR newswire reported.

European leaders have yet to agree on a broad plan to help Greece, support European banks and bolster the euro. Originally they were supposed to announce a comprehensive solution to the debt crisis during the session being held later today, Wednesday, October 26, in Brussels, the TASR newswire reported.

Now, however, the meeting of European leaders may only prepare solutions that will later be discussed by finance ministers from the whole European Union. The finance ministers will have to meet in the following days to “fine-tune the agreements made to be passed tomorrow [October 26]”, said a spokesperson for European Council President Herman van Rompuy, Dirk De Backer.

Slovak Finance Minister Ivan Mikloš, who was also preparing for the summit, said he believes that one of way to solve the crisis is the recapitalisation of European banks to ensure that states and their citizens do not lose their money.

“We are nearing an agreement stating that in order to make Greek debt sustainable, the restructuring will need to be greater than that agreed at the July summit,” Mikloš said, as quoted by TASR, adding that the consensus is that the country’s debt will only be sustainable if it falls below 120 percent of GDP by 2020.

In order to avoid the potential collapse of European banks, which would initiate a chain of events that would lead to the debt crisis spreading to countries such as Spain, Italy, Belgium and France, the system’s most significant banks will have to be bailed out, said Mikloš.

A system worked out by European finance ministers stipulates that in the first instance bank owners and other private investors should use their own resources to boost bank capital, TASR reported. If this is not possible, recapitalisation from public finances should follow, with the use of EFSF resources as the last resort.

The Wednesday summit will be also attended by Slovakia’s outgoing prime minister, Iveta Radičová. Ahead of the summit, she will attend a session of the Slovak Parliament’s committee for European affairs, in order to provide information to its members about the European Council session. The committee is expected to bestow a mandate on Radičová to represent Slovakia at the summit, TASR wrote.

Source: TASR

Compiled by Radka Minarechová from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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