EU finance ministers have outlined a provisional deal to protect European banks from a potential Greek debt default, ahead of a leaders’ summit in Brussels today and another meeting next week.
Overcoming opposition from Spain, Italy and Portugal, they have agreed on the need to inject around 100 billion euros into the banks if conditions are met.
There is talk of progress but leaders know divisions remain, notably between France and Germany.
“Between now and Wednesday we must find a solution, a structural, ambitious and definitive solution. There is no other choice,” said French President Nicolas Sarkozy.
The German Chancellor Angela Merkel said far-reaching decisions had to be taken. A major sticking point is on how to boost the euro emergency fund, with markets sceptical that it could handle deeper euro zone turmoil.
As for Greece, awaiting another chunk of bailout funds, more controversy beckons over the scale of private investors’ potential losses.