Below are the main developments in the euro zone's debt crisis today.
- Greece will miss deficit targets set less than three months ago as part of a massive bailout package, according to government draft budget figures released yesterday.
If true, the second bailout will be insufficient to fill Greece's debt hole and euro zone officials say the shortfall will have to come from the banks as well as European governments. A deeper haircut for banks than the 21 per cent already agreed would amount to a default.
- Euro zone finance ministers meet later today to discuss ways to leverage their EFSF bailout fund to give it more firepower to prevent contagion should Greece default, although no decisions will be taken.
The ministers will also heap pressure on Greece to implement agreed structural reforms - including a privatisation drive which is falling short - to try to get its economy growing again.
- European Central Bank member Christian Noyer said it was unrealistic to expect an increase in the size of the European Financial Stability Facility, but that he was open to programmes that would allow leveraging to expand capacity.
- Shares in Franco-Belgian financial group Dexia drop nearly 10 per cent after ratings agency Moody's put it on watch for a downgrade, citing "further deterioration in the liquidity position of the group in light of the worsening funding conditions in the wider market".
Interbank lending has dried up due to concerns about bank exposure to struggling euro zone sovereigns. French media reports say Belgian and French finance ministers will meet on Monday to discuss ways to shore up the balance sheet of Dexia, which has one of the largest exposures to Greece among non-Greek banks.
- The euro zone's manufacturing contraction deepened in September as new orders shrank at their fastest pace since June 2009, a business survey showed today.