European leaders have agreed to use euro zone bailout funds to directly recapitalize struggling banks
European leaders meeting in Brussels have agreed to use euro zone bailout funds to directly recapitalize struggling banks, Reuters reported.
A decision was reached just before dawn on Friday, after 14 hours of marathon talks, with leaders agreeing to create a supervisory body for euro zone’s banks by the end of the year.
European Council chairman Herman Van Rompuy said the move aimed to break the “vicious circle” between banks and governments, as it will enable lenders to receive a financial boost without adding to government debt.
Al Jazeera reported the decision marks a victory for Italy and Spain, which are facing spiraling borrowing costs – that risk forcing them out of the capital markets – adding that Germany had backed down somewhat on demanding that countries implement tough reforms in exchange for bailout funds.
Van Rompuy described the decision to directly recapitalize euro zone banks as a “breakthrough,” while the German Chancellor Angela Merkel said she was “very satisfied that we took good decisions on growth.”
While euro zone leaders agreed to begin implementing the decisions by July 9, the EU’s existing bailout fund will continue to provide aid until the new fund, the European Stabilization Mechanism, begins operations, the BBC reported, adding that money may not be available until the end of the year.
More Related Stories
- If Alex Pareene was a cable news executive...
- Portland's senseless war on fluoride
- Graphic video reportedly shows possible London machete attack suspect
- What economists get wrong about the jobs crisis
- Ted Cruz: "I don't trust the Republicans"
- Pa. governor "can't find" any Latinos to work in his administration
- Glenn Beck: "The American people have just been raped"
- "Original Coca-Cola had a very small amount of cocaine"
- Corporations accused of wrongdoing win battle to keep identities secret
- Weak, incompetent Democrats blow another one
- Lois Lerner, IRS disaster
- Cyber attacks could cause the next world war
- Donald Rumsfeld worried that marriage equality will lead to polygamy
- Experts: Fox News spying scandal a game-changer
- Biden cracks Obama teleprompter joke
- IRS official takes the Fifth: "I have not done anything wrong"
- Lessons from Lincoln leave gay immigrants behind
- Los Angeles elects first Jewish mayor
- Peter King: There's "hypocrisy" over aid by Oklahoma senators
- Anthony Weiner announces run for NYC mayor
- How policy nihilists in the Senate doomed LGBT immigrants
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11
Salon is proud to feature content from GlobalPost, an awarding-winning international news site that focuses on original reporting from journalists stationed around the world. GlobalPost combines traditional journalistic values with the power of new media to offer a fresh perspective on global developments.