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EU leaders start work on Spain, Italy

Thursday, June 28, 2012 - 02:25

June 28 - EU leaders began a summit deeply divided over how to resolve the euro zone's debt crisis, with Italy and Spain calling for urgent help to ease financial market pressure and bring down their borrowing costs. Joanna Partridge reports from Brussels.

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Europe under construction - or is it re-construction. As work took place outside on the new European Council building - the leaders inside also had some heavy duty work to do. There are growing fears the euro might fall off a precipice, some are calling this summit the most crucial since the debt crisis began. As they arrived for their 20th meeting in two years, the leader had never seemed so divided. German Chancellor Angela Merkel was concentrating on growth and employment. SOUNDBITE: GERMAN CHANCELLOR ANGELA MERKEL SAYING (German): "We've worked through a good programme especially as far as future investment is concerned, but also for more employment opportunities, especially for young people. I hope that we will be able to pass this pact today and therefore will be able to send out an important signal in addition to the fiscal pact." Despite her talk of growth, she's an advocate of austerity. That position has set her apart from her neighbours. But Germany holds the pursestrings - and therefore most of the power. In recent days, Merkel has ruled out euro bonds and rebuffed pleas from Spain and Italy to underwrite their debts and bring down their borrowing costs. Brenda Kelly is from CMC Markets says the leaders can no longer be accused of kicking the can down the road. SOUNDBITE: BRENDA KELLY, MARKET ANALYST, CMC CAPITAL MARKETS, SAYING (English): "A lot of these countries are doing what is politically useful for them rather than what is useful for the euro zone as a whole - so I think that's why we are seeing the can pretty much flattened at this stage." PTC: Leaders of the euro zone's 4 biggest economies put in a lot of work to prepare for this meeting - but they still aren't singing from the same hymn sheet. Italian Prime Minister Mario Monti has already said he won't just "rubber-stamp" documents written ahead of time, and was prepared to work through until Sunday night. Italy is leading the calls for using European bailout funds to stabilise the markets, setting up a showdown between Merkel and Monti. It's not the only case of Germany facing Italy. The country's two football teams were meeting on the pitch to gain a place in the final of the European Championships - the leaders here know the stakes are much higher. Joanna Partridge, Reuters

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EU leaders start work on Spain, Italy

Thursday, June 28, 2012 - 02:25