Europe leaders to meet on debt crisis

Updated: 2011-07-16 08:57


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BRUSSELS - Eurozone countries would hold an emergency summit next Thursday in a bid to handle the prolonged debt crisis in Europe, European Union (EU) president Herman Van Rompuy said Friday.

"I have asked the preparatory work to be brought forward," Van Rompuy said in a message on Twitter.

The financial stability of the eurozone and further aid for debt-ridden Greece are the two key issues high on the agenda of the eurozone summit, according to the president.

Earlier this week, a EU diplomat was quoted by the local media as saying that the eurozone will hold an emergency summit on Friday this week.

Admitting during a visit to Portugal on Tuesday that there was "a high contagion risk" of the debt crisis and relating measures were "urgently needed" Van Rompuy said that an emergency meeting of the eurozone leaders would not be excluded.

With the debt crisis threatening to engulf Italy, the third largest economy of the eurozone, the emergency meeting would continue to focus on the second bailout package for Athens in a bid to prevent spill-over of the crisis.

Some eurozone members, led by Germany and the Netherlands, have insisted that the private sector should be involved in the new rescue plan substantially.

But eurogroup finance ministers failed to reach a deal at their regular meeting Monday on the extent to which the private sector should be involved.

Instead, they vowed to take several measures, including giving more flexibility to the current rescue mechanism, to prevent contagion risk of the debt crisis "as soon as possible".

The ministers entrusted a working group to work on the modalities for financing a new aid program to Athens, steps to reduce the cost of debt-servicing and means to improve Greek debt sustainability.

There is also difference on whether to accept a selective default of Greece. The ministers noted that the European Central Bank confirmed its position last week that a credit event or selective default should not be avoided.

But there has been a shift in the attitude of the eurozone finance ministers, with some saying that a selective default could be a possibility.

Analysts said that if the scheduled summit could not produce any concrete results contagion fears of the crisis could be heightened.


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