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'D-Day' debt summit in Brussels highlights differing views

brussels bureau

'D-Day' debt summit in Brussels highlights differing views


While the 27 eurozone leaders are in Brussels strategising and negotiating on the debt crisis, observers are speculating on the final outcome – including if and how stances have changed since the summit over the weekend.

Senior economist at financial institute ING Carsten Brzeski said he would not be surprised if the ECB did play a role in increasing funds for the European Financial Stability Fund known as EFSF: “I think right now the German position seems to be very firm, saying no further role for the ECB and no leverage to the ECB. Nevertheless, if you look at the current proposals, how the to leverage the EFSF – therefore, how to increase the rescue fund – I don’t know whether this is really the final word. Perhaps the ECB will get a role further down the road, in the coming months. This could create an easy to understand big ‘bazooka’ for the eurozone in the shape of an unconditional lender of last resort.”

With the recapitalisation of Europe’s banks high on the agenda at Brussels, there are those, like Oxfam’s EU spokesman Nicolas Mombrial, who think it is time concentrate on what banks can do to help society, rather than how the governments are going to protect the banks.

“I don’t believe the argument that the banks don’t have money to pay, or that they cannot pay, or they will have to ask for public money. I think governments are already doing a lot to help the banks by bailing them out. Now it’s also time for banks – I mean the financial sector in general – to also pay attention to their responsibilities.”

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