The EU is entering “the critical period of 10 days to complete and conclude the crisis response of the European Union,” said Olli Rehn, Economic and Monetary Affairs Commissioner, quoted by Reuters (in picture, right).  EU leaders will meet at the European Union summit on December 9 in Brussels.
Eurozone finance ministers were in talks until late last night (Tuesday 29) trying to reach agreement on how, and how much to increase funding for European Financial Stability Facility (EFSF) – ahead of providing bailout packages to debt ridden EU economies.

Current funding levels have been sufficient to bailout Greece, Ireland and Portugal’s smaller economies but with the increasing likelihood that Spain and Italy (the EU’s third largest economy) will need EFSF rescue packages to avoid defaulting on loans, the EFSF needs to beef up its funds considerably. Ministers did agree to release the latest EUR 8 billion chunk of bailout funds for Greece. However, ministers commenting after the meeting said the planned EUR 1 trillion target for the EFSF looked unlikely.

China, among others, is showing reluctance to investing in eurozone debt and calls are coming from around the world to resolve the debt crisis before the world’s markets are damaged even more. US president Barack Obama has said failure in Europe to resolve the debt crisis will hinder his job creation program.

And the cost of failure? If the euro collapses, economic catastrophe in Europe and beyond.

Liam Lever, liam@romania-insider.com

(Photo source: Ecofin; in picture, from left to right: Klaus REGLING, European Financial Stability Facility , Jean-Claude JUNCKER, Luxembourg Prime Minister, President of the Eurogroup , Olli RHEN, Member of the European Commission)