Confusion reigns in Brussels as European finance ministers' meeting is cancelled

(REUTERS)

Today's emergency summit in Brussels, which has been billed by some as a last chance to secure a deal that would end concerns about the eurozone's sovereign debt crisis, was thrown into confusion last night as it was revealed that a meeting of European finance ministers has been cancelled.

The absence of the continent's key economic ministers from the summit, where they were due to meet in advance of the formal EU leaders' meeting, raised doubts about the level of crucial detail that will be unveiled in plans that are supposed to safeguard the future of the single currency.

In Britain, officials were privately downbeat about any final deal being reached, although Mr Cameron still intends to attend the meeting.

"Our sense at the moment is that these issues may not be resolved in time to announce any sort of comprehensive plan tomorrow night," a Government source said yesterday. "It's quite likely we will be back again in a few days' time."

The German Chancellor, Angela Merkel (pictured above), also indicated she is fiercely opposed to the inclusion of any form of words in the plan that would enable the European Central Bank (ECB) to buy sovereign bonds to stabilise European debt markets. Referring to a draft of the summit statement mentioning the ECB's bond purchase scheme, she told reporters: "This sentence was not agreed by us."

There were signs, however, of progress on what size of writedown to impose on banks that hold Greek sovereign debt. Jean-Claude Juncker, who leads the group of eurozone finance ministers, said: "The private creditor participation will have to be more substantial, about 50 per cent."

Details of a complex plan to inflate the firepower of the European bailout fund, the European Financial Stability Facility, were also leaked last night. This is expected to involve insuring portions of newly issued sovereign bonds and also to establish a new fund designed to attract money from global investors.

The build-up to the summit was further coloured by anxiety over Italian Prime Minister Silvio Berlusconi's ability to guarantee debt-slashing measures to satisfy the demands of other eurozone governments without causing the collapse of his fractious coalition.

This was a prospect that only receded last last night, when Mr Berlusconi's king-making coalition partner, the Northern League, finally agreed to his planned reforms.