European Leaders Hit Debt-Crisis Stalemate

Problems include discord over a banking union, Spain’s foot-dragging and Greece’s debate on meeting bailout terms.

European leaders are struggling to overcome a crisis-fighting stalemate as they face discord over a banking union, Greece’s ongoing debate on how to meet bailout commitments and foot-dragging by Spain on aid requests.

Chancellor Angela Merkel and President Francois Hollande underlined Franco-German disagreement over the weekend as they clashed on a timetable to introduce joint oversight of the region’s banking sector, with Merkel rebuffing Hollande’s appeal to activate it “the earlier, the better.”

Castle Meeting

Their meeting in the 18th-century Ludwigsburg castle was also the latest in which Merkel and Hollande struggled to find common ground since the French president won office in May on a platform of opposition to Merkel’s austerity agenda.

Fund Leverage

Germany’s Der Spiegel magazine reported that the euro’s permanent bailout fund, the European Stability Mechanism, could be leveraged with outside capital to generate more than 2 trillion euros in emergency funds. While Germany’s Schaeuble welcomed the idea, Finland has objected, the magazine said. Spiegel didn’t say where it obtained the information.

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