French President Nicolas Sarkozy backed down on Sunday in the face of implacable German opposition to demands to use unlimited European Central Bank funds to fight the euro zone's deepening sovereign debt crisis. European Union leaders wrangled for hours over procedure and made little apparent progress in forging a strategy to overcome the crisis despite pressure from international partners and financial markets for decisive action. Sarkozy acknowledged that France's proposal to multiply the firepower of the euro zone's rescue fund by turning it into a bank and letting it borrow from the ECB was doomed for now because neither Germany nor the central bank would agree to it. "No solution is viable if it doesn't have the support of all the European institutions," the French leader told a joint news conference with German Chancellor Angela Merkel. Merkel said only two options remained on the table for leveraging the 440 billion euro ($600 billion) rescue fund, and neither involved drawing on the central bank. Euro zone officials said the solution was likely to be a mixture of using the European Financial Stability Facility to provide partial guarantees to buyers of new Italian and Spanish bonds and creating a special purpose vehicle with the IMF to attract funds from major emerging countries such as China. In the only tangible sign of progress on Sunday, leaders said they endorsed a broad framework drafted by their finance ministers for recapitalising European banks to cope with likely losses on Greek and other euro zone sovereign bonds. But much time was spent on procedural squabbles with non-euro members Britain and Poland demanding that all 27 EU states, including the 10 that are not in the single currency, be fully involved in the crisis response. That forced the calling of another full EU summit for Wednesday evening. With alarm growing in Washington, Beijing and other capitals about potential damage to the global economy, leaders effectively have four days to work out a comprehensive strategy to halt the crisis that began two years ago in Greece. http://www.reuters.com/article/2011/10/23/us-eurozone-idUSTRE79I0IC20111023
well the pathetic stocks purchases will continue with eurusd in the belief they will still sort it out. such is the madness of the last few weeks.