EUROPE’S leaders are grappling to find a solution to the debt crisis by the end of today, their latest self-imposed deadline.
Jittery markets nose-dived yesterday after news broke that a meeting of Eurozone finance ministers – known as Ecofin – had been cancelled. Confusion over the announcement led to false rumours that the whole crisis-tackling conference had been scrapped.
The FTSE fell off a cliff, dipping 1.48 per cent to 5,465 points on its open. Yet the blue-chip index recovered later in the day, as it was confirmed that the wider summit of EU and Eurozone leaders will proceed as normal.
The FTSE closed down 0.41 per cent at 5,525.54 points and the DAX 30 fell 0.14 per cent to 6,046.75 points. In France the CAC 40 was down 1.43 per cent to 3,174.29.
Meanwhile Italian Prime Minister Silvio Berlusconi said the ruling coalition was at risk of falling apart over plans to raise the state retirement age. Last night Umberto Bossi, leader of the Northern League, said the coalition has come to an agreement on state pension provisions -- yet hinted that it may not be enough for other European leaders.
And Italian consumer confidence has sunk to a three year low, data revealed yesterday, adding further weight to forecasts that the country is heading into recession.
Eurozone plans for leveraging the European Financial Stability Facility (EFSF) could be thrashed out today, in a bid to save struggling peripheral states. It is likely that a special purpose investment vehicle (SPIV) will be established, into which investors will put money. As private investors have not yet been approached, a draft communiqué suggests it may take until the meeting on 7 November to finalise plans.
Eurozone officials said last night that the International Monetary Fund (IMF) might participate in the EFSF -- a move that would see the UK contribute to the bailout fund.