European Union leaders dropped their demand that investors share the cost of bailouts as Germany abandoned a campaign that helped deepen the two-year-old financial crisis.
Limiting so-called private-sector involvement to the terms accepted in International Monetary Fund bailouts was part of a package agreed upon in Brussels early today as leaders met to forge tighter economic bonds to stem the crisis.
�As regards private-sector involvement, we have made a major change in our doctrine: from now on we will strictly adhere to the IMF principles and doctrines,� EU President Herman Van Rompuy told reporters at a briefing. �Or, to put it more bluntly, our first approach to PSI, which had a very negative effect on debt markets is now officially over.�
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IMF Principles
Spelled out pretty clearly.