EU debt solution still out of reach
A definitive solution to the European debt crisis will not now be reached until next Wednesday, as finance ministers -- including Michael Noonan -- meeting in Brussels yesterday failed to reach agreement.
Government leaders, including Taoiseach Enda Kenny, will meet later today and attempt to bring finality to a range of measures aimed at stabilising the eurozone.
"We have had enough of short-term measures, sticking plasters that get us through the next few weeks," British Chancellor George Osborne said yesterday.
The ministers, who have been locked in talks since early Friday, are nearing agreement on forcing banks to raise just over €100bn to make sure they have enough reserves to weather further losses on their Greek debt holdings and market turmoil, a European official said.
Ministers are attempting to put in place a sufficient buffer to protect the system if and when Greece eventually defaults on its debt.
The Taoiseach, who travelled to Brussels last night, said: "Decisiveness must be shown by all leaders in finding solutions to the current crisis so that much-needed confidence can be restored to markets and certainty provided for all citizens of the EU."
Eurozone finance ministers decided last Friday that banks must take larger writedowns on their Greek bonds if Athens is ever to dig out from under its debts. A new report said Greece's debt load may need to be slashed up to 60 per cent -- as opposed to the 21 per cent tentatively agreed to in July.
A negotiator from the eurozone has been asked to reopen discussions with banks. The next step is to shore up the banks ahead of those losses.
While higher than recent press reports have suggested, the recapitalisation figure is likely to disappoint some analysts. A report by the IMF has called for up to €200bn to be poured into banks.
The new rules would force systemically important banks to raise their core capital ratios to nine per cent, compared with just the five to six per cent they needed to pass the EU stress tests.