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EU leaders in Brussels for crucial summit

European Union leaders are gathering in Brussels Wednesday to finalize urgent plans aimed at resolving the euro zone debt crisis.

Euro zone crisis 06 27 2011Enlarge
A customer pays for fish with euro banknotes at a fish stand at the Boqueria market on June 22, 2011 in Barcelona, Spain. (David Ramos/Getty Images)

European Union leaders are gathering in Brussels Wednesday to finalize urgent plans aimed at resolving the euro zone debt crisis.

ITN news reported that hopes the summit would lead to an agreement on how to best support struggling member states, and recapitalize regional banks, took a blow when an earlier meeting of EU finance ministers was cancelled.

Read more on GlobalPost: EU finance leaders cancel meeting

The BBC reports that there are doubts as to whether the EU leaders will reach a comprehensive deal at Wednesday's talks.

With fears that Greece's sovereign debt crisis could spread to Italy and Spain, there is disagreement on how to boost the EU's bailout fund, the European Financial Stability Facility (EFSF).

Germany and France have the biggest exposure to Europe's debt. France wants the European Central Bank to prop up the EU's bailout fund by providing it with loans.

According to the BBC, this was blocked by German Chancellor Merkel.

The BBC reports:

"Instead, governments are expected to agree that the EFSF can help out troubled euro zone governments such as Italy and Spain by providing partial guarantees to investors and banks who lend them more money."

Other issues concern how to recapitalize Europe's most exposed banks.

ITN News reports that a provisional agreement is already in place, to the tune of about 100 billion euros (140 billion dollars).

A decision also needs to be made on whether private investors will write off at least 50 percent of Greece's debt.

The summit of EU leaders comes ahead of a G20 summit on Nov.ember 3 and 4, in the southern French city of Cannes.

http://www.globalpost.com/dispatch/news/regions/europe/benelux/111026/eu-leaders-meeting-brussels