Show Hide image

EU leaders meet to stop debt contagion

Leaders hold debt discussion amid rumours that Spain is next to be rescued financially.

EU leaders are currently meeting in Brussels to discuss reforms meant to restore the credibility of the euro, and rein in the worst public debt in the eurozone for decades.

Ahead of the G20 summit next week, leaders of the EU nations are threatened with the increasing possibility of Europe's fifth-largest economy, Spain, asking for a huge bailout to get its finances back on track.

Spanish government officials, however, dismissed reports that the country was already in discussions for a rescue package worth up to €250bn, which would dwarf the €110bn (£90bn) rescue plan for Greece.

The European Central Bank has reportedly given record amounts of liquidity to Spanish banks in recent days, although the Spanish government unilaterally offered to open the books of its own private banks to prove that they were sound.

The EU and IMF have set up a €750bn (£623bn) safety net for eurozone countries that lose the confidence of financial markets.

The leaders are expected to approve a new 10-year initiative called "Europe 2020", which sets out a range of targets for jobs and growth.