Following the news that Berlin and Paris remain divided on how to make the euro-zone bailout fund more effective, European efforts to stem the debt crisis have taken another blow thanks to a split between the International Monetary Fund and the European Union.The IMF has rated EU projections for Greece's debt as too optimistic, and wants to delay approval of the next tranche of aid until after the Brussels summit this weekend to see if a clearer picture emerges, EU officials said.
Without a loan payment of €8 billion euros from the EU and IMF, Greece faces a default next month, a development that could also threaten to drag Spain and Italy into the mire through a contagion effect. Euro-zone leaders are racing to agree on new steps to reduce Greece's debt, strengthen the capital of banks and leverage the European Financial Stability Facility (EFSF) euro backstop fund to stem contagion to bigger economies -- but progress appears slow. more
