European leaders push back debt solution deadline

Christopher Werth Oct 21, 2011
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European leaders push back debt solution deadline

Christopher Werth Oct 21, 2011
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Steve Chiotakis: Efforts in Europe to solve the debt crisis there are in disarray at the moment. Germany and France say they will not be able to bridge their differences in time for a summit this weekend on Sunday. So the two countries are calling a second meeting — and pushing a grand plan deadline back a few days.

Reporter Christopher Werth now has more from London.


Christopher Werth: One of the biggest sticking points dividing Germany and France: how big will losses be on bad Greek debt. Germany wants banks and other private investors to take a bigger hit. France believes that will make problems worse. At the same time, the two countries remain divided over whether the European Central Bank should be used to increase the power of the euro zone’s financial stability fund.

But as European leaders dither, Cinzia Alcidi of the Centre for European Policy Studies says this time there’s no room for mistakes.

Cinzia Alcidi: If there is delay, and in the end the solution that is proposed is considered insufficient, then we could find ourselves again in a situation of extremely high pressure.

And by high pressure she means that borrowing costs for countries like Italy and Spain will rise immediately, and threaten the stability of the eurozone.

In London, I’m Christopher Werth for Marketplace.

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