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Markets take Europe's delay in solving debt crisis in stride
LONDON (AP) ' Markets appeared to be not overtly concerned that Europe will not be able to come up with a comprehensive plan to deal with its crippling debt crisis in time for a weekend summit.
Europe's main stock markets all opened higher Friday despite confirmation that Germany and France will not be able to bridge their differences in time for a summit Sunday, forcing them to call a second meeting, by Wednesday at the latest.
Sunday's summit was supposed to deliver a comprehensive plan to finally get a grip on the currency union's debt troubles by detailing new financing for debt-ridden Greece. It also was supposed to produce plans to make Europe's banks fit to sustain worsening market turbulence and further empower the eurozone bailout fund.
It seems that Europe's two biggest economies are at loggerheads over how to make best use of the bailout fund, the so-called Euroepan Financial Stability Facility, or EFSF. While France is proposing to turn into a bank, which would have access to unlimited credit from the European Central Bank, Germany appears reluctant to sanction such a move .
"Considering the importance of the discussions and there potential impact upon the European economy, global capital markets and the future of the EU itself a delay of a few days is neither here nor there in the overall scheme of things," said Gary Jenkins, an analyst at Evolution Securities. "However the suggestions that they are still far apart on how to make best use of the EFSF is of some concern."
What to do about the EFSF doesn't seem to be the only point of contention.
Germany and several other rich countries have been pushing for banks and other private investors to take steeper losses on their Greek bondholdings, before the eurozone can sign off on a second multibillion euro rescue package for the struggling country.
France and the European Central Bank have so far opposed forcing banks to write off more Greek debt, fearing that would destabilize the banking sector and worsen market turmoil.