Finance ministers from euro zone countries gathered in Brussels for a meeting to discuss rescue measures decided at the June European Union (EU) summit meeting, and pessimistic markets drove the euro down to a two-year low in anticipation of the talks.
Bloomberg reported Monday that finance ministers planned to discuss crisis-fighting measures that were agreed on by government heads at the June meeting. Among those measures was a relaxation of conditions on emergency loans for Spanish banks.
Reuters reported that the country was to be given an extra year to bring its deficit in line with the target of 3% of GDP, with the concession being announced by three EU diplomats ahead of an official decision on Tuesday. One of the unnamed diplomats was quoted saying,
“Spain’s budget consolidation targets will be adjusted to give it an extra year. This is not a unilateral move. Spain needs to make the necessary cuts to reach that goal and this will be discussed on Tuesday at the Ecofin [meeting of ministers]. I expect the extra year to be granted.”
Other measures to be discussed include granting the European Central Bank (ECB) more oversight of the euro zone’s banks and use of the euro zone’s rescue funds to reduce countries’ borrowing costs. However, few details have been decided and differences among countries could end up taking months to resolve.
A diplomat familiar with the agenda was quoted saying, “This is very much the follow on from the summit, but it doesn’t mean all details can be set down. The issue of ECB supervision is a complex, longer-term issue and not one that can be decided in a few hours.”