Dutch finance minister says agreement near

12th July 2011, Comments 0 comments

The EU's efforts to contain fears of debt contagion are having little effect, with stocks and the euro slumping worldwide as finance ministers went into new talks.

Investor worry sent Italian markets crashing for a third day over concerns the debt crisis could engulf Europe's third and fourth biggest economies - Italy and Spain. Stocks nose-dived from Tokyo to Frankfurt, while the European single currency hit a four-month low point in London as ministers from the 17-nation eurozone were joined by counterparts from the full EU 27 for a second day of talks.

The tumult sent Italy's minister Giulio Tremonti rushing home early "to complete my austerity plan," a four-year bid to nip 40 billion euros off the budget, which hit a 4.6 percent deficit last year.

Agreement: Dutch finance minister The EU ministers, scheduled to meet till early afternoon, were eyeing step-by-step proposals issued the previous day by eurozone ministers after more than eight hours of tough discussions that spilled till midnight.

Dutch minister Jan Kees de Jager said broad agreement had emerged. "We have managed to break the knot, a very difficult knot of a contradictory statement ... saying that you want substantial private sector involvement and on the other hand you have at all times to avoid a selective default."

"Now we can do the work," he said

Working group toil on But no formal decisions are on the table, with a range of proposals to help Greece, including longer loans and lower rates, left in the hands of a working group, which is looking at different ideas on private sector participation

Monday's conclusions, issued after weeks of dithering and contradiction, came as Greek Prime Minister George Papandreou urged fellow EU leaders to end divisions and send a clear message to sceptical markets.

"There is no room for indecision and mistakes...such as allowing cacophony to substitute for a common agenda and create more panic than security," Mr Papandreou said.

© Radio Netherlands Worldwide

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