Political and economic crisis in Italy spurred fears of a split in the euro zone with borrowing costs for the country at unsustainable levels and the bloc unable to afford a bailout.
Officials from France and Germany had held discussions on a two-speed Europe with a smaller, more tightly integrated euro zone and a looser outer circle.
From news.yahoo.com:
The discussions among senior policymakers, still in the realms of the theoretical, have focused on how to protect the euro zone from breaking up via tighter common policies which some members may by unable or unwilling to live with.
A German government spokesman said on Thursday that Berlin was not pursuing the idea of a smaller euro zone.
Asian shares fell more than 3 percent after similar falls on Wall Street and in Europe as investors took fright at the accelerating sovereign debt crisis and at buck-passing among European leaders and institutions.
“There cannot be peace and prosperity in the North or in the West of Europe, if there is no peace and prosperity in the South or in the East,” Barroso said in a speech in Berlin.
