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Acrimony, Frail Plan as Euro Talks Adjourn

Analysts unimpressed by plan to bolster banks

By Neal Colgrass, Newser Staff

Posted Oct 24, 2011 4:25 PM CDT

(Newser) – With the Greek economy in shambles and Italy's teetering, European leaders emerged today from talks on saving the Euro—with little to show for it, the New York Times reports. Their big announcement—a mandate for banks to bolster their reserves—inspired a sigh from analysts, who say the proposed $139 billion reserves aren't enough to create confidence in the banks' creditworthiness and reinstate their access to world money markets.

“We’re going to need potentially much more capital to provide that comfort," says one London analyst. Also at issue was how much debt Greece should actually pay off. Banks balked at a devaluation of 60%, which Greece might be able to afford, and adopted a hard line of 21%—leaving many policy-makers frustrated. Says one banking rep: “Any approach that is not based on cooperative discussions and involves unilateral actions would be tantamount to default."

French President Nicolas Sarkozy talks as German Chancellor Angela Merkel receives help with her earphone from Italian Prime Minister Silvio Berlusconi. (AP Photo/Virginia Mayo, File)

German Chancellor Angela Merkel and French President Nicolas Sarkozy walk to a press conference at EU headquarters in Brussels on October 23, 2011. (Getty Images)

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Acrimony, Frail Plan as Euro Talks Adjourn

Analysts unimpressed by plan to bolster banks

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Angela Merkel • Europe • Nicolas Sarkozy • Euros • banking • Greek debt crisis

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Brits Refuse to Back New Europe Pact

But 23 nations agree to austerity measures in new accord

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Meanwhile, Merkel and Sarkozy try to drum up support for plan

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Chance of Greek PM Losing Confidence Vote: High

Meanwhile, the G20 wrestles with Greece mess

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