EU leaders to meet in Brussels will decide if the euro will survive or not

Indonesia stock info - EU leaders to meet in Brussels will decide if the euro will survive or not, EU political leaders to meet in Brussels December 9th 2011 ; Europe's sovereign-debt crisis, which has dragged on for more than two years, is entering a pivotal week, as leaders across the continent converge to prevent a collapse of the euro and a financial panic from spreading.

Expectations are rising that Friday's summit of 27 EU leaders will yield a breakthrough. An agreement on tighter integration of the 17 countries that use the single currency -- especially on budget matters -- would be seen as a crucial first step. That could trigger further emergency aid from the European Central Bank, the International Monetary Fund or some combination, analysts say.

The coming days "will decide if the euro will survive or not," Emma Marcegaglia, the head of Italy's industrial lobby, Confindustria, said Sunday.

French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank Chief Draghi, and even U.S. Treasury Secretary Timothy Geithner will star in a 5-day financial drama leading up to the summit.

If the summit is a failure, Sarkozy warned last week, "the world will not wait for Europe."

Sarkozy and Merkel meet in Paris on Monday to unveil a proposal for closer political and economic ties between the 17 countries that use euro. While the leaders differ on some of the details, their cooperation has been so tight they have come to be known by a single name -- "Merkozy."

The two agree overall on the need for rules that would prevent governments from spending or borrowing too much -- and on penalties for violators.

"Where we today have agreements, we need in the future to have legally binding regulations," Merkel said Friday.

The urgency has been heightened in recent weeks as Italy and Spain, the continent's third- and fourth-largest economies, face unsustainably high costs to finance their debts. For example, the yield on 10-year Italian bonds is around 7 percent. Yields above that level forced Ireland, Portugal and Greece to seek bailouts. By comparison, bond yields in Germany, Europe's largest and most stable economy, are roughly 2 percent.

The eurozone is threatened to face an existential situation if it becomes clear over the next few weeks that several member states cannot cover their refinancing needs, or can only do so at suicidal conditions," former German Finance Minister Peer Steinbrueck told the Sunday edition of German tabloid Bild.

"Everything must be done to hinder the Eurozone from breaking up," he said.

Italy, whose sovereign debt is equivalent to 120 percent of the country's economic output, needs to refinance euro200 billion ($270 billion) of its euro1.9 trillion ($2.6 trillion)of outstanding debt by the end of April.

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