October 27, 2011
Deep divisions between euro-zone governments and private banks over how much to cut Greece's private debts threatened to undermine efforts by European leaders to agree to a broad package at a Brussels summit Wednesday night aimed at stemming the Continent's intensifying debt crisis.
The three elements of the package—a deal to finance Greece to 2014, a boost to the euro-zone bailout fund and more money for struggling European banks—all hang on one another. Without a final deal on Greece—in particular on how deep the losses holders of Greek government bonds are expected to suffer—precision on other elements of the deal is impossible.
Still, some details emerged late Wednesday. European regulators said banks in 13 countries would need to come up with a total of €106 billion ($148 billion) of new capital by the middle of next year, in line with expectations.
Even if the leaders at the Brussels summit cobble together a credible-sounding deal, many officials warned that negotiating the details would take weeks.
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