EU leaders will be returning to their capitals tonight without reaching a final ‘comprehensive deal’ on the eurozone’s future. The President of the European Council Herman Van Rompuy said that he was “adjourning the summit for Wednesday when we should have a final deal.”
Malta was represented at the summit by Prime Minister Lawrence Gonzi who earlier in the day said that Malta was open to limited Treaty changes in order to further deepen fiscal integration of the Eurozone, but only “if this is absolutely necessary.”
Addressing a press conference tonight, Mr Van Rompuy, flanked by the President of the European Commission, expressed optimism that “a deal will be reached in just 72 hours” which should reinstate confidence in the Eurozone.
No specific details were given on the ongoing talks, although Mr Van Rompuy said that this will include a second bailout for Greece, the recapitalisation of the European banking system and more fire power to the €440 billion rescue fund (the EFSF), without requiring further guarantees by member states.
Mr Van Rompuy said that some member states also need to convince their counterparts by Wednesday that they will keep to their commitments to reduce high debts and deficits. Without going into details he mentioned Italy and Spain.
Finance Ministers are expected to meet in Brussels in the coming days prior to this Wednesday’s ‘follow-up’ summit.
Speaking alongside German Chancellor Angela Merkel at a joint press conference, French President Nicolas Sarkozy said this evening that "quite a broad agreement is taking shape on the reinforcement of the EFSF."
Merkel said a French idea for the fund to acquire a banking licence was dead and buried, leaving a mix of plans to use the EFSF to offer insurance to eurozone bond holders, and moves to create a 'fund within the fund' that would be topped up by some of the main emerging nations.
The "leveraging" of the EFSF comes alongside a deal being negotiated with banks for them to accept a 50 percent write-off on Greek debt, in exchange for a new bailout by the EU and the International Monetary Fund.
All of the outline decisions reached so far over a frenetic three-day series of high-level talks in Brussels need to be ratified by the 27 member at the full summit that EU president Herman Van Rompuy called for Wednesday.
Italy emerged as a new source of concern, with Italian Prime Minister Silvio Berlusconi under intense pressure to cut his country's deficit and debt.
"We have to reassure investors and reassure other states," Van Rompuy said.
He underlined: "Clearly, we are asking for a major effort on the part of the Italian authorities."
Italy is carrying debts of 1.9 trillion euros -- equal 120 percent of what the eurozone's third-largest economy produces in a year and way above the EU limit of 60 percent.
Germany's Merkel urged "credible" cuts in the debt as part of efforts to save the eurozone.
"Italy is a great economic force but Italy also has a very high level of debt and it must be reduced in a credible way over the coming years," she said. "That's what we expect of Italy."
The outcome of the back-to-back summits is being keenly watched around the world as concerns have grown that the eurozone debt crisis could spark a fresh global recession.
Leaders know that the financial markets are hoping for a concrete agreement this time around after months of agony and uncertainty over whether they really can tame the debt crisis for good.