October 27, 2011
After nearly 11 hours of talks, European leaders reached a breakthrough on Thursday morning. The euro-zone states have concluded a deal that will see banks give Greece a 50-percent debt haircut and governments provide billions of euros in taxpayer money for the bailout of the common currency. However, details remain vague about plans to leverage the euro backstop fund.
Normally, European leaders have nothing against extended bargaining sessions with seemingly no end in sight. But on Wednesday night, they gave themselves a deadline. Belgian Prime Minister Yves Leterme announced prior to the meeting that the 17 heads of state from the euro zone would have to finish up their haggling before the first markets opened in Asia. Otherwise, he seemed to suggest, global stock prices would plummet on Thursday morning.
And yet, summit participants ignored one deadline after another. At 2 a.m., the markets opened in Japan, but euro-zone leaders continued to haggle. At 3 a.m., Singapore opened, and the meetings were still going on.
It was only just before 4 a.m. -- the stock exchanges in Shanghai and Hong Kong had already begun trading -- that a visibly exhausted French President Nicolas Sarkozy stepped before the press in Brussels. Euro-zone leaders, he announced, had agreed with private creditors on a 50 percent reduction in Greece's debt burden.
The announcement was consistent with the number which had dominated the headlines for days. Euro-zone leaders had reached their primary goal.
"France had always wanted to avoid the drama of a Greek insolvency," Sarkozy said. He left unmentioned the fact that he had long resisted the idea of a substantial, voluntary debt haircut for Greece. It was one of several positions that France was forced to abandon in the course of the last six days of summit meetings.
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