EU to hold summit in preparation for G20, worsening debt crisis

The European Union (EU) will hold a summit meeting on Oct. 17-18 to prepare its stance in G20 summit meeting in November, and deal with worsening sovereign debt crisis facing the eurozone, the European Council said Monday. According to a statement issued by the Council, major topics to be discussed in the summit will be enhancing competitiveness of Europe and maintaining growth, as well as EU position for the G20 summit to take place in Cannes in early November. But sovereign debt and recently exposed banking problems will surely be part of topics to be discussed. With Greek government debt crisis worsening in recent weeks, European policy makers tend to change their tones and started to admit there was possibility of default. "Trioka" recently warned that bailout for Greece would fail if it did not carry out more strict austerity measures. Besides, eurozone member states also mull a 60-percent Greece debt reduction, according to sources close to the German government disclosed recently. Banking system will surely be a hot topic in this summit. Problems in Dexia bank uncover huge risk exposure European banks hold and politicians are talking about recapitalization of banks. German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed Sunday on recapitalization of banking system, as well as "sustainable and comprehensive" response to the current euro crisis. They may also submit proposals to the summit for extensive dialogue, though there may not be a concrete result in the summit.