Aug. 5 - As European leaders come under pressure to take decisive action to stop a spiralling debt crisis EU Monetary Affairs Commissioner Olli Rehn vows to defend the euro and says that recent selloffs on markets are not justified. Ciara Sutton reports.
It was supposed to be a solution to the euro zone debt crisis. Last month after numerous meetings EU leaders finally agreed on a new fund to stabilise European debt. Hopes were high, but the markets didn't have the same optimism. Global stocks have taken a battering and EU leaders are again holding emergency talks - this time by phone - to prevent the crisis deepening. The EU's Monetary Affairs Commissioner Olli Rehn admitted things hadn't gone entirely to plan. (SOUNDBITE) (English) EUROPEAN UNION ECONOMIC AND MONETARY AFFAIRS COMMISSIONER, OLLI REHN, SAYING: "Markets have not reacted as we expected or hoped for to measures agreed by the euro area heads of state and government on the 21st of July. The spread of bond market tensions across the euro area is however not justified by economic and budgetary fundamentals." Rehn also stressed pulling out of the euro was not an option. (SOUNDBITE) (English) EUROPEAN UNION ECONOMIC AND MONETARY AFFAIRS COMMISSIONER, OLLI REHN, SAYING: "The political will to defend the euro should not be underestimated. Since the onset of the crisis, euro area leaders have proven that they could always take the necessary decisions and do so in a continuously evolving situation." The spotlight is now on Italy as concerns mount that it could be the next euro zone victim. Italian finance minister Guilio Tremonti met with Eurozone chairman Jean-Claude Juncker on Wednesday to discuss the worsening situation. As Europe's second biggest debtor, pressure there is mounting - Italian stocks and bonds were particularly hard hit in this week's sell off. And the euro zone rescue fund isn't big enough to bail them out. The ECB has also warned Italy and Spain must enforce tougher austerity measures before they will help. Ciara Sutton, Reuters