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Creating a clear strategy towards closer fiscal integration and a banking union is expected to top the agenda at a two-day EU leaders' summit starting Thursday in Brussels.
But markets and policy experts have few expectations the summit will result in a magic-bullet solution to the sovereign debt crisis that is now well into its second year.
As EU leader’s gather for their latest summit in Brussels, the European Commission president painted a clear picture of what’s at stake.
Jose Manuel Barroso, European Commission president says, “I think it’s very important that this European council rules out any doubt about the irreversibility of the Euro. It is critical to show the determination of the European leaders regarding the financial stability, regarding the common currency”.
The hunt continues for a breakthrough in the debt crisis that now threatens the Eurozone’s third and forth largest economies, Spain and Italy along with smaller Cyprus.
Rescues for Spain and Cyprus will be discussed, along with a banking union and closer fiscal and political integration.
Leaders will also examine giving rescue loans directly to troubled banks instead of member states, which would prevent further government debt piling up and give the impression of a more orchestrated approach to crisis fighting by Brussels.
Jack Barton says, “This will be the 20th meeting of leaders since the Eurozone sovereign debt crisis first erupted in Greece more than two years ago. As with many of those past meetings the concern is that this could be a meeting big on ambition but lacking in real substance”.
Some policy analysts believe the proposals don’t go far enough or will simply take too long to implement.
Janis A. Emmanouilidis, senior analyst of European policy center says, “The problem is will they have an immediate affect on the crisis, and that is difficult to give a proper assessment, but probably not really, so the crisis will drag on unfortunately”.
A concern shared even by the Commission President.
Jose Manuel Barroso says, “We must articulate the vision of where Europe must go and a concrete path for how to get there. I’m not sure that the urgency of this is understood in all the capitals of the European Union”.
It is an urgency well understood by the international community that knows any further deterioration of Europe’s debt crisis will act as a brake on the overall global economy.
No surprise then that for the next two days, all eyes are on the Belgian capital.