Dithering?

Euro-region central bank governors will hold emergency talks today intended to stop Spain and Italy from becoming the next victims of the sovereign-debt crisis and limit fallout from the first U.S. credit-rating cut in history.


The central bank chiefs will convene by conference call at 6 p.m. Paris time, said a euro-area central bank official who declined to be identified because the talks are confidential. A spokesman for the European Central Bank declined to comment. Finance ministry officials of the Group of Seven countries were due to hold a conference call starting at 6 p.m. in New York yesterday to discuss the crisis.

The flurry of talks comes as the U.S. downgrade by Standard & Poor’s threatens to further derail efforts to stop the debt crisis from engulfing the euro-area’s third and fourth-largest economies.

“Europe is in an incredibly dangerous situation,” Nick Kounis, head of macroeconomic research at ABN Amro in Amsterdam, said in an interview by telephone yesterday. “The risk is that the U.S. downgrade is just going to unsettle everyone even more. It’s a unique situation in that we are essentially in the heart of a European sovereign debt crisis, which has reached its meltdown phase.”