Euro zone summit likely to give few numbers on crisis response

Reuters
October 25, 2011

Euro zone leaders are unlikely to provide many hard numbers to flesh out their debt crisis response at a summit on Wednesday because the size of banks' losses on Greek bonds is still under negotiation and the bigger firepower of the bailout fund is tough to quantify, euro zone officials said.

Euro zone leaders may not be ready to name the exact size of the "haircut" for investors on Greek debt, but may indicate the desired level -- thought to be between 50 and 60 percent -- by announcing the intended size of public sector help and the target for Greece's debt-to-GDP ratio in 2020, officials said.

Leaders of the 17 countries using the euro meet on Wednesday evening to try to agree on a comprehensive response to the escalating sovereign debt crisis. The response is expected to include a plan to recapitalize banks, boost the firepower of the EFSF bailout fund and a new financing package for Greece.

But there are already doubts that concrete steps, including clear and hard numbers on the level of bank recapitalization and the leverage of the EFSF, will be agreed.

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