Finance ministers of the European Union settled on a deal for recapitalizing European banks (NYSE:KBE) and there is promise of a debt crisis breakthrough during the EU summit scheduled for Wednesday. After 10 hours of debate, the finance ministers agreed to inject 100 billion Euros into European banks in order to protect them from Greek debt default and other debt crises in Europe.
The ministers will submit their conclusions to EU leaders who have a summit scheduled for Wednesday. The German Chancellor and French Prime Minister both made remarks indicating that progress had been made and they expect a definitive plan to be announced after Wednesday’s summit. Per Reuters, Nicolas Sarkozy said “Progress has been made. Between now and Wednesday a solution must be found, a structural solution, an ambitious solution, a definitive solution.”
Several areas of disagreement still remain, the largest of which is how the EU will strengthen its 440 billion emergency fund set up last year known as the European Financial Stability Facility. The fund has thus far been used to bail out Ireland and Portugal. There is also still dissension around how to deal with Greece’s impending debt default. The markets await the final results of Wednesday’s summit.