All eyes are on German Chancellor Angela Merkel, as Europe’s leaders gather in Brussels for talks on the bloc’s on-going debt woes.
Described as a crunch summit to save the euro and stop a full blown bank crisis, Merkel attempted to strike an optimistic tone.
“I think we will agree a new rescue plan for Greece, which will be an important signal. With it we want to tackle the problem at its roots. That is to say that to deal with Greece’s indebtedness while also improve its competitiveness,” she said.
The deal was thrashed out on Wednesday after lengthy discussions between Merkel and French President Nicolas Sarkozy.
For the moment the full details of the rescue are unclear. However, Berlin and Paris now seem willing to allow Athens to slip into a temporary default as part of a bond buyback scheme. The plan does not appear to include a levy on lenders.
EU chief Jose Manuel Barosso, who on Wednesday called on leaders to act decisively, told reporters he was hopeful. ‘‘I’m sure we’ll find a good solution for Greece and all eurozone members,” he said.
Merkel confident of agreement on Greek rescue plan