Eurozone struggles to find solution to debt crisis

Leaders of the four largest economies of the Eurozone - Germany, France, Italy and Spain - will meet on June 22 in Rome to seek common ground on how to resolve the debt crisis that threatens to engulf both Spain and Italy.

While France hopes for a "four-way contribution" to averting the crisis, Italy does not believe the upcoming meeting will produce concrete solutions.

Eurozone countries recently agreed to give Spain 100 billion euros ($125 billion) to rescue its banking system, while the victory of pro-austerity parties in the Greek election has temporarily pushed back the risk of the country leaving the Eurozone.

Illustration photo. (Source: Internet)

However, this has done little to ease market concerns, as borrowing costs in Spain and Italy have spiked to dangerous levels.

European leaders are again under intense pressure to act quickly to resolve the crisis.

Although Spain has secured a bailout from the eurozone, there are concerns that it will need a full bailout, raising the possibility that the crisis could eventually hit Italy too.

While leaders are preparing strategies to contain the spread of the virus, eurozone finance ministers will meet in Luxembourg on June 21 to fine-tune the details of Spain's bailout in a way that could ease market tensions.

According to Italian Prime Minister Mario Monti, decisions on the European issue will be made in the next few days, with specific interventions.

At the recent G20 Summit, European leaders pledged to strengthen banking integration and restore growth.

Deposit insurance and allowing failed banks to close are seen as ways to boost the flow of cash in the financial system and increase confidence in lending.

On the issue of boosting growth, Germany has been more lenient, arguing that there needs to be a balance between austerity measures and stimulus spending.

However, there are still differences between countries, as Germany calls for structural reforms to increase competitiveness and remains opposed to allowing the European Central Bank to inject cash or issue euro bonds, while France and Italy say such bonds are a necessary solution that needs to be implemented immediately./.

According to (Vietnam+) - DT