European leaders hold summit on debt crisis

European leaders hold summit on debt crisis

POSTED: Thursday, July 21, 2011 - 8:52am

UPDATED: Tuesday, November 20, 2012 - 10:04am

European leaders held a summit in Brussels thursday after overcoming differences on how to address the continent's debt crisis. French President Nicolas Sarkozy and German Chancellor Angela Merkel met for seven hours in Berlin wednesday amid mounting pressure to find a solution to Greece's debt problems. European leaders are trying to keep the crisis from spreading to larger economies such as Spain and Italy.

Merkel called talks with Sarkozy "constructive" and said they had prepared an agreement with the president of the European Union. Neither Merkel nor Sarkozy's office released details about their plan. Luxembourg's Prime Minister and Eurogroup Chair Jean-Claude Juncker said the final deal could mean credit agencies slap a "selective default" rating on Greece.

That could create fresh financial turmoil, especially if the European Central Bank cuts off emergency support for Greek banks, which it threatened if Greece is considered to be in default. European leaders have been trying to reach an agreement that makes sure banks and other private investors help pay for a bailout without triggering panic if the crisis spreads to larger European economies.

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