January 31, 2011
European leaders could announce broad outlines of a new deal to boost the euro zone's bailout funds at a summit on Friday, paving the way for a final agreement when they next meet in March, European officials say.
It isn't yet clear whether enough agreement will emerge at the meeting to make an announcement about the rescue funds, but European officials said they expected discussions over the issue Friday as part of a two-step process that will be concluded in late March.
The summit will come days after euro-zone leaders and senior politicians took the opportunity at the World Economic Forum in Davos to try to convince top business figures, bankers and government officials of their commitment to the euro.
French President Nicolas Sarkozy said Germany and France "will never abandon the euro." German Chancellor Angela Merkel described the euro as "much more than a currency," saying: "If the euro fails, Europe fails."
Many bankers and economists, though, still argue that the weaker economies of the euro area remain at risk of financial or banking shocks, and that growth will remain sluggish for years. Many say Greece, at least, will have to restructure its debt, a prospect repeatedly denied by Greek Prime Minister George Papandreou.
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