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(For more on the European debt crisis, see EXT4.)
Oct. 27 (Bloomberg) -- European leaders are set to ratify an agreement with banks on a 50 percent writedown of Greek debt, said a European official who requested anonymity because the deliberations remained private.
The figure would pave the way for a broader package to recapitalize banks and boost the rescue fund in a revamped strategy to combat the debt crisis. The euro rose as news of the agreement broke, climbing as much as 0.4 percent to $1.3956.
More than nine hours of brinkmanship at the second crisis summit in four days focused on measures that the euro area’s stewards said point the way out of the debt quagmire, even if key details are lacking.
Last-ditch talks with bank representatives led to the debt- relief accord, in an effort to quarantine Greece and prevent speculation against Italy and France from ravaging the euro zone and wreaking global economic havoc.
Europe’s leaders took the unusual step of summoning the banks’ representative, Managing Director Charles Dallara of the Institute of International Finance, into the summit to break the deadlock over how to cut Greece’s debt to 120 percent of gross domestic product by 2020.
Dallara squared off with a group led by German Chancellor Angela Merkel around midnight after issuing an e-mailed statement that “there is no agreement on any element of a deal.”
--With assistance from Helene Fouquet, Gonzalo Vina, Tony Czuczka, Ewa Krukowska, Chiara Vasarri, Jim Brunsden, Aaron Kirchfeld, Jonathan Stearns, Stephanie Bodoni, Jurjen van de Pol and Angeline Benoit in Brussels, and Lorenzo Totaro and Flavia Rotondi in Rome. Editors: James Hertling, John Fraher
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