European leaders are struggling

European leaders are struggling to overcome a crisis-fighting stalemate as they face discord over a banking union, foot-dragging by Spain and Italy on financial aid and Greece’s ongoing debate on how to meet bailout commitments.

In Greece, the government and its international creditors took a week-long break from negotiations on additional funding as Prime Minister Antonis Samaras’s coalition struggles to carve out 11.5 billion euros in budget cuts. The troika of creditors - - the International Monetary Fund, the ECB and the European Commission -- said on Sept. 21 they’ll take a “brief pause” after making “good progress” in talks.

Der Spiegel also cited a preliminary troika report as identifying a 20 billion-euro gap in Greece’s budget. Samaras said he’s confident the government will overcome differences over more than 7 billion euros in cuts to wages, pensions and benefits as Greece confronts a fifth year of recession and more than 25 percent unemployment.

Even as the euro area faces a recession and rising unemployment, a return of confidence in the bloc’s outlook and the threat of inflation may prevent monetary policy makers from cuttinginterest rates further, ECB Executive Board member Benoit Coeure said in the West Bank city of Ramallah.
http://www.bloomberg.com/news/2012-09-23/euro-leaders-seek-end-to-stalemate-as-discord-mounts-on-crisis.html