European Leaders Deal Directly With Debt Dilemma.

[elleng]

With a new sense of urgency, the leaders of the 27 European Union nations grappled directly on Sunday with their thorniest financial and economic problems, and made progress that they promised could yield a complete package of measures within days. . .

The meeting on Sunday, which included a separate session of the 17 nations that share the euro currency, was tense and sometimes acrimonious. French and German leaders told Prime Minister Silvio Berlusconi of Italy in blunt terms that he must move faster to reduce his country’s huge debt of nearly two trillion euros ($2.8 trillion), or about 120 percent of gross domestic product, which makes his country a target of speculators. . .

Despite the friction, concrete progress was made. The leaders reached overall agreement on recapitalizing Europe’s shaky banks, which they decided required an extra 100 billion euros. They agreed that banks should first raise what capital they can privately, and then turn to their own governments if necessary. If those governments already have debt problems, then the bailout fund, called the European Financial Stability Facility, could be drawn upon, but only “as a last resort,” Mrs. Merkel said.

http://www.nytimes.com/2011/10/24/business/global/24iht-euro24.html?hp