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November 07, 2011 at 07:32 AM
BRUSSELS (AP) — Financial officials from around Europe met Monday in Brussels for urgent talks on how to ease Europe’s debt crisis, calm markets and — as one of them put it — “stop the rot.”
After a week of economic and political turbulence extraordinary even by the standards of Europe’s worsening debt crisis, officials planned to discuss the finances of Greece and Italy. They will try to stop financial contagion by speeding up efforts to give more leverage to their bailout fund, known as the European Financial Stability Facility, or EFSF.
Increasing the firepower of the EFSF has become more challenging since last week, when world leaders at a meeting of the Group of 20 leading economies failed to agree on any additional support or investments from outside the eurozone.
“To my mind, the key to restore and reinforce confidence in Europe as a whole, at least in the euro area, is to solve the sovereign debt crisis and mitigate its impact in the banking sector,” ensuring that citizens and businesses can get credit, European Union Monetary Affairs Commissioner Olli Rehn told the European Parliament before the finance ministers’ meeting.
“This current financial turbulence is really eroding the foundations of economic growth and employment in Europe,” Rehn said. “So the first thing to do in the current situation is to stop the rot.”
On his way into the meeting, Greek finance minister Evangelos Venizelos said the country now has a government “of national responsibility” that could implement financial reforms demanded by its international rescue creditors.
Greece’s main political parties agreed over the weekend to create a 15-week government tasked with enforcing the terms of the latest euro130 billion ($179 billion) rescue package before elections. The parties were still in talks to name a prime minister for the interim administration.
“After a difficult week, we now have a new political situation, a new political frame, in Greece,” Venizelos said. “This is the proof of our commitment and our national capacity to implement the program and reconstruct our country.”
