NEWS

Germany digs in heels over Greece summit

Euro zone plans for a leaders? summit on a second Greek rescue were thrown into doubt by Germany on Wednesday, raising fears markets may exploit the policy vacuum with a new onslaught on the bloc?s high debtors.

Berlin stuck to its line that Greece was funded until September so there was no rush. ?There are no concrete plans for a special summit,? a German government spokeswoman said.

Others were less sanguine. Italian central bank chief Mario Draghi, soon to take the helm of the European Central Bank, and Ireland?s prime minister said a definitive plan was needed and quickly — echoing a strongly-worded attack from Greece?s premier earlier in the week.

Ratings agency Moody?s downgraded Ireland?s credit to junk status on Tuesday and said that, like Greece, it would need a second bailout. Minds have really been focused by a market attack on Italy which, if it required assistance, would overwhelm the euro zone?s existing rescue funds.

?Moody?s problem is not with Ireland, Ireland?s problem is with Europe,? Prime Minister Enda Kenny told parliament. ?There is no point in having a meeting that won?t bring about a conclusion in a comprehensive sense to something that is not going to go away unless it is dealt with.?

Italian and Spanish bonds settled on Wednesday but Irish yields surged to record highs in response to Moody?s action. Traders did not expect much respite without decisive action.

?The big countries are in this crisis now, it?s getting pretty dangerous,? one trader said. [Reuters]