EU calls emergency summit on Greece

July 15, 2011 - 1:44 PM
Belgium EU Libya

European Council President Herman Van Rompuy, right, addresses the media with the executive head of the Libyan opposition National Transition Council Mahmoud Jibril after a meeting at the EU Council in Brussels, Thursday July 14, 2011. (AP Photo/Geert Vanden Wijngaert)

BRUSSELS (AP) — The leaders of the 17 eurozone countries will hold a special summit Thursday in an attempt to forge a deal on a second bailout for Greece.

European Union President Herman Van Rompuy called the meeting Friday night, after disagreement over the contribution of banks and other private investors in a second rescue package rocked markets for much of the week.

Fears that Greece's private creditors may have to take losses as part of the deal dragged the big economies of Spain and Italy into the debt crisis, which has so far been confined to small states like Greece, Ireland and Portugal.

Leaders of the struggling countries have pushed their eurozone counterparts to come up with a solution quickly, while Germany, the biggest European contributor to the rescue packages dragged its feet.

Greece needs an extra euro115 billion ($162.68 billion) to keep it afloat until mid-2014, according to the European Commission — on top of a euro110 billion bailout it was granted last May. Asset sales by the Greek government and the country's private creditors — which have so far been spared — are expected to pay for part of the bill.

Apart from reaching a deal on Greece's rescue package, leaders are also set to overhaul the currency union's bailout fund, giving it wider powers and lowering interest rates and extending loan maturities for already bailed out countries in an effort to make their debts more sustainable.