Eurozone leaders head into fresh talks Monday to craft a new rescue package for Greece hoping to bridge widening splits over private sector involvement as Europe’s debt crisis threatens to spiral.
After a tumultuous week that saw debt contagion hit Italian banks and Spanish bonds, and borrowing costs peak for eurozone struggler Ireland, finance ministers from the 17-nation area will meet on Monday afternoon. Their counterparts from the full EU 27 will join them on Tuesday.
Gathered just a week after plucking Athens from default this summer — clearing a 12-billion-euro slice due from its first 2010 bailout — eurozone leaders have delayed a final decision on a second rescue until September. Observers are not expecting a quick fix at this week’s talks.
Instead, it will focus on how to get banks to bear a fair share of involvement in a second Greek bailout — and in such as a way as to avoid it being interpreted as a credit default that would ripple across the single currency zone.
The prickly issue in the last days has exposed sharp splits in the euro-front, and comes days ahead of much-awaited July 15 data on European bank stress-tests.
Differences that flew into the open after a market-rattling decision last week by Standard