EU Calls Top Officials to Meet on Greece Aid

The Wall Street Journal

By RIVA FROYMOVICH

European Union President Herman Van Rompuy has called a meeting of top EU policy makers Monday to discuss plans for a second bailout package for Greece, EU officials said on Sunday.

The gathering comes as Europe continues to struggle with a contentious issue: whether and how Greece's private-sector creditors should share the burden when the anticipated second aid package is doled out to the debt-burdened country.

Germany and other euro-zone nations are pushing for some form of burden-sharing—for instance, delaying repayments to private-sector bondholders whose debt is about to mature. The European Central Bank is opposed.

Mr. Van Rompuy's meeting will include ECB President Jean-Claude Trichet, Luxembourg Prime Minister Jean-Claude Juncker, European Commission President José Manuel Barroso and EU economy commissioner Olli Rehn.

Many of the attendees are scheduled to be in Brussels on Monday for a regular meeting of the group of euro-zone finance ministers, of which Mr. Juncker is chairman. The wider finance ministers' meeting, too, is expected to include the Greek problem.

A senior euro-zone official called Mr. Van Rompuy's meeting a precursor to the already scheduled Monday evening meeting of euro-zone finance ministers. "There are various concerns and worries about the progress of the second bailout package [for Greece], mostly because of little progress in the private-sector involvement," said the official. "It's not moving at the expected pace."

Another EU official said there are several preparatory meetings that take place before finance-ministers' gatherings, adding this is "no emergency whatsoever."

Mr. Barroso's spokeswoman said he will attend his regular coordination meeting with Mr. Van Rompuy, "enlarged to other actors, as has happened in the past."

Meanwhile, Italy's stock-market regulator late on Sunday introduced temporary measures aimed at curbing speculative attacks on the Milan stock market, in a move that tries to respond to a wave of selling that hit Italian bank stocks on Friday.

Stocks closed down 3.5% on Friday and the spread between 10-year Italian and German bond yields reached a record 2.47 percentage points on escalating concerns that debt-laden Italy might be dragged into the European debt crisis. A group of five Italian banks underwent a stress test, the results of which will be released July 15.

The new measures in Italy require market operators to disclose short-selling moves above certain levels, according to a statement released by Consob, the regulator. The measures will be effective starting Monday and will remain in force until Sept. 9, the statement said.

EU leaders have agreed that some form of private-sector involvement is necessary for another emergency loan to Greece so that the burden on euro-zone taxpayers is lightened. It has been so far impossible to nail down exactly how private creditors should be involved.

Ratings companies have said that efforts that leave private creditors in worse financial shape will likely compel the companies to declare Greece in default. ECB officials have said a default is unacceptable. Talks with groups of creditors have yielded few results.

Charles Dallara, the head of the Institute of International Finance, a banking-industry trade group, said last week that a "selective default" by Greece need not be as dire as widely thought, if it were temporary. A selective default occurs when an issuer defaults on some of obligations but continues to service others.

—Costas Paris contributed to this article