Halfway to a series of meetings decisive for the future of the euro, Europeans always struggled Sunday to set a major response to the crisis of debt, after Greece, Ireland and Portugal , now threatens to bring Italy and Spain.
Saturday, more than ten hours of meetings were needed to reach an agreement on a recapitalization of the banking sector to the tune of 100 billion euros, which was yet largely gained at the technical level this week.
The work, however, little or no progress on the form that is chosen to leverage the fund to support the euro and to reduce the Greek mountain of debt, even if a discount up to 60% of the shares held by investors Private is under discussion.
These discussions are held with their eyes on the economic situation in Italy which puts the Europeans against the wall because the current instruments to support the single currency are not powerful enough to rescue a country of this size .
As a prelude to the European Council, Nicolas Sarkozy and Angela Merkel met with Italian Prime Minister Silvio Berlusconi for half an hour Sunday morning.
Diplomats said the meeting was organized to increase the pressure on it so that it implements a more resolute reforms announced in September and reassures markets on its ability to maintain control in the Italian debt, which exceeds 120% of GDP.
A German government source said the head of the French state and the German chancellor had stressed "the urgent need for concrete and credible actions in the countries of the euro area", otherwise the decisions taken in the coming days n ' will have no effect.
Angela Merkel had insisted on Saturday that Italy would reduce its debt so as not to jeopardize the support mechanisms for the euro, "regardless of the height of these walls of protection."
BANKS
On his arrival in Brussels, the Chancellor warned that one should not expect final decisions at the EU summit and the euro area held Sunday.
It must now rely on the consent of the German parliamentarians to any reform of the fund to support the euro, making it difficult European negotiations.
Following an agreement reached Saturday, about sixty of the largest European banks need to recapitalize by 30 June 2012 at 100 billion euros to hold at least 9% of equity "hard" core tier one .
Some 38% of this amount, which may not be officially published, should return to the three countries already under the aid program: Greece, Portugal and Ireland.
Banks will also mark their sovereign debt to market value and the institutions that will not comply with this set of rules will be banned from paying dividends to their shareholders and bonuses to their executives.
The bloc have also talked Saturday reactivation of the guarantees offered to banks in the fall of 2008 at the height of the crisis, enabling them to find financing in the medium and long term, said on the same source.
According to this, three models are being studied, with varying degrees of coordination between European security mechanisms.
GREECE
Ministers are also extensively revenues Saturday on the back Greek and how to make Greek debt sustainable in the long term.
According to a report that will serve as the basis for decisions of the leaders of the euro area, private creditors of Athens may have to accept a loss of up to 60% on their sovereign debt.
The EU finance ministers, however, remain divided on the voluntariness or otherwise of the private sector to the new rescue plan for Greece.
Fearing to trigger a credit event with unforeseeable consequences, France and several other countries are reluctant to go beyond the envelope of 50 billion euros negotiated last July 21 with the banks, as called for Berlin if necessary by forcing them to go the extra mile.
Friday night, Athens received a shot in the arm with the provisional go-ahead European payment by mid-November of the next tranche of international assistance by 8 billion euros, without which Greece would default on its sovereign debt in the coming weeks.
The IMF still has to validate itself as such payment, subject to his ambitious decisions of Heads of State and Government of the euro area to reduce the mountain of debt indefinitely.
EFSF
The last part of the discussions – the multiplication of the European Financial Stability Fund (EFSF) – has so far been barely touched by the ministers, that would leave it to decide this question and leaders.
Friday night, Minister of Economy, Baroin, confirmed that France continued to believe that change the cash in bank was the best solution even if Paris does not make a red line.
According to several sources, Nicolas Sarkozy hopes to build on a broad international support to try to convince Angela Merkel, less than two weeks of the G20 summit in Cannes where international partners in Europe hold them accountable.
Granted a banking license in EFSF would allow access to funding from the European Central Bank to increase its capacity for action by a factor of up to five.
But Berlin rejects this possibility, which would be to accept that the institution of Frankfurt finance the countries of the euro area, one of the dogmas explicitly excluded by the European treaties since the creation of the euro.
The other members of the euro area are also divided, Belgium and Spain having voted for a reconciliation BCE-EFSF while Slovakia and Austria have indicated that this solution was not studied.
European leaders are under intense pressure by their international partners to take decisive action against the crisis.