Two separate press conferences from top European leaders failed to raise hopes that a European solution would be forthcoming.
Competing press conferences given by French President Nicolas Sarkozy and German Chancellor Angela Merkel, and by European Council President Herman van Rompuy and European Commission President Jose Manuel Barroso.
In line with general consensus on the meeting’s outcomes, leaders said they would wait until Wednesday to announce any plans for Greece, bank recapitalization, leveraging the EFSF, and changes to EU governance.
Leaders also ruled out using the European Central Bank to help recapitalize the banks and leverage the European Financial Stability Fund, the rescue fund that will be used to stop the crisis from spreading. France’s Sarkozy had previously endorsed a larger role for the ECB to the dismay of Merkel and Germany. Expanding the ECB’s role would likely have violated standing EU treaties.
A little more on what’s been decided so far this weekend:
– Banks will first be asked to seek capital on their own, then seek money from their national governments, then finally the EFSF. The ECB will not be involved.
– Two options are currently on the table for leveraging the EFSF, again without the help of the ECB.
– That financial transaction tax Merkel and Sarkozy started talking about in August is getting a lot of attention. Sarkozy said that the financial sector will have to play a part in the recovery from this crisis, considering their role in catalyzing it.
– Italy got a lot of heat, as its economic situation deteriorates.
– “No solution is viable unless it enjoys the support of all European institutions,” Sarkozy told the Press. No word on how they’ll get all that necessary support…or when.