Van Rompuy: Emergency euro summit 'not excluded'

BRUSSELS - Leaders of the 17 euro-using countries are expected to meet in Brussels on Friday (15 July) to help calm markets after the results come out of EU 'stress tests' on banks.

EU Council President Herman Van Rompuy at a press conference in Madrid on Tuesday said he had not yet made up his mind, but added that "such a meeting could not be excluded."

A diplomat from one of the eurozone countries told this website "apparently he's planning something, but we don't know when."

Another EU diplomat said: "It would make sense if there was a summit on Friday because that's when the results of the banking stress tests are published. If there is a summit, that would suggest there is more nervousness about the stability of the euro than we thought."

The EU is testing 91 major banks to see how they would cope if there was a 0.5 percent contraction in the eurozone economy, a 15 percent drop in stock markets and defaults on sovereign debt.

The results are due out amid nervousness on the financial markets over a potential default in Greece and concerns if Italy and Spain will be able to manage their borrowing.

The bank results - designed originally to restore faith in the EU's financial sector - could make matters worse.

An internal EU document obtained by Bloomberg said the risk "should not be underestimated" that private firms will use the published data to run their own stress tests and to reach more critical results than the EU officials.

A letter from the German banking association, the ZKA, to the EU-level bank body, the EBA, said: "Given the tense situation which already exists in money and capital markets, we believe publishing the results with the present level of detail would exacerbate the sovereign debt crisis."

For their part, EU finance commissioner Olli Rehn and Polish finance minister Jacek Rostowski after a meeting of the 27 EU finance ministers on Tuesday did their best to allay worries.

"It's essential that we provide the solution as the same time that we identify the problem," Rehn said.

Rostowski, speaking for the Polish EU presidency, noted: "Today we spent most of our time going over those measures [private or public sector bailouts for troubled banks], to make sure every member state is ready and up to speed."

The 17 euro-using countries' finance ministers earlier on Monday night failed to agree details of a second bailout package for Greece. The meeting instead convoked a 'Eurogroup Working Group' to look at how to manage the Greek situation, with a communique saying the taskforce will report back "shortly".

In a sign of growing bad feeling inside the currency club, the Greek leader himself on Monday lambasted the EU's treatment of Greece.

"We risk new, and possibly global, market calamities due to a contagion of doubt that could engulf our common union," George Papanderou wrote in a public letter to Jean-Claude Juncker, the president of the eurogroup, the euro-using countries' club.

"Crunch time has arrived and there is no room for indecisiveness and errors such as: taking decisions that in the end prove 'too little, too late' to convince the markets we are serious ... [or] allowing a cacophony of voices and views to substitute for a shared agenda, thereby creating more panic than security."