Trichet at late-night Sarkozy, Merkel talks: source

20th July 2011, Comments 0 comments

European Central Bank head Jean-Claude Trichet would join the leaders of Germany and France for talks in Berlin late Wednesday a day ahead of a eurozone summit, a diplomatic source told AFP.

Trichet was due to talk with Chancellor Angela Merkel and French President Nicolas Sarkozy following their working dinner, on the eve of a crunch summit in Brussels aimed at agreeing a new rescue deal for Greece.

A number of figures, including European Commission President Jose Manuel Barroso, issued stark warnings Wednesday about the need for the 17 leaders to agree a new package for Greece on Thursday.

Berlin has been at odds with the ECB and Paris over Merkel's demands for private investors to shoulder some of the bill for what will be the eurozone's fourth bailout following other emergency programmes for Ireland and Portugal.

There are concerns that any change to the terms of outstanding Greek sovereign bonds could prompt ratings agencies to declare Athens in default, with potentially dramatic consequences for the European and global economies.

Alternatives floated include a bank levy, or for the European Financial Stability Facility (EFSF) to lend money to Athens for it to repurchase Greek bonds, thereby reducing its debt mountain.

© 2011 AFP

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