Leaders from throughout the European Union are gathering today in Brussels for an emergency summit to hash out the details of a plan to solve the eurozone debt crisis.
Earlier this week, German Chancellor Angela Merkel said that she expected the progress already made to result in a “breakthrough” at today’s summit.
Though Merkel made the remark in confidence, doubt continues to grow about the leaders reaching a consensus on a comprehensive, detailed plan.
Much of this has to do with general disagreement on the most efficient way to boost the EU bailout fund’s firepower, with some countries such as Portugal and Italy saying that the cost is too high.
However, there are further fears that Italy may soon need the help of the bailout fund, as many are worried about “contagion,” or the fear that the Greek crisis could spread to Italy and Spain.
Additionally, Italy is scheduled to provide details of its austerity measures to wrangle its huge public debt before the summit even begins.
The coalition in power, headed by Italian Prime Minister Silvio Berlusconi, has reportedly reached a last-minute deal on economic reforms.
Despite doubts that Wednesday’s meeting will provide the miracle cure for the eurozone, there were some main points that EU officials agreed upon during meetings at the weekend.
Among the agreed-upon points was that banks must raise more than 100 billion euros (£87 billion) in new capital. This is meant to shield them against losses from loans to indebted countries, such as Greece.
Though it is not clear what methods the leaders will choose, they have also agreed that the eurozone bloc’s 440 billion euro bailout fund, called the European Financial Stability Facility, must have more firepower.
A final point that banks are decidedly unhappy with is that Greece’s lenders will be asked to take much deeper losses than the previously suggested 21% write-off.