European leaders jolted by the sudden return of debt-crisis turmoil will gather for talks in Brussels this week as they attempt to restore investor confidence in the euro area.
After a week when European stocks went into meltdown, leaders including German Chancellor Angela Merkel and French President Francois Hollande will meet for a two-day summit beginning Oct. 23 with the region’s economy back on the agenda.
“It’s a wake-up call to the entire euro-zone leadership that the strategy that they have been following, with a strong fixation on the fiscal deficit targets, is not working,” Charles Dallara, the former chief of the Institute of International Finance, said in an interview Oct. 17.
The EU’s 28 leaders prepare to meet as echoes of the crisis that emerged in Greece in late 2009 reverberate around them, with a slump in government bonds in peripheral countries and a global stock-market decline of more than $3 trillion so far this month. The economy of the 18-nation euro area stagnated in the second quarter and inflation, at 0.3 percent last month, isn’t seen returning to the European Central Bank’s target of just under 2 percent before 2017.
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