FOREX NEW YORK COMPANIES

• Leaders of Germany, France, Italy and Spain met at 12noon in Rome
• France, Italy and Spain were expected to pressure Merkel to ease measures
• FTSE 100 down 0.93%; DAX down 0.93%; CAC 40 down 0.50%
  

By Daily Mail Reporter

PUBLISHED: 03:47 EST, 22 June 2012 | UPDATED: 12:12 EST, 22 June 2012

Greece's new finance minister was rushed to hospital today after fainting - as eurozone leaders agreed to push for a €130billion growth package at next week's key European Union summit.

Vassilis Rapanos, 65, was taken to a private Athens hospital where he is undergoing tests and is likely to be under observation for at least two or three days.

The incident came as the leaders of France, Germany, Italy and Spain met in Rome to find a way to pull Europe out of its crippling debt crisis.

Now hospitalised: This photograph, taken on Thursday, shows Greek Finance Minister Vassilis Rapanos attending the new Government's first cabinet meeting at the Greek Parliament in Athens

Italian Prime Minister Mario Monti said the message the four leaders wanted to come out of next week's EU summit is that the euro will survive.

He said: 'We expect the conclusions of the EU summit will be more solid and credible compared with previous summits as far as growth is concerned.'

German Chancellor Angela Merkel, French President Francois Hollande, Spanish Prime Minister Mariano Rajoy and Monti also want the June 28-29 summit to come up with a 'clear medium- and long-term vision for greater integration' in the eurozone, he said.

Finally, next week's summit should 'put at ease the financial markets expectations', he said before shifting into English from Italian to add 'that the euro is here to stay and we all mean it.'

It has seen world markets dip. The FTSE 100 is 0.93 per cent down at 5,514.61; Germany's DAX is 0.93 per cent down at  6,284.31; and France's CAC 40 is 0.50 per cent down at 3,098.75.

Monti had earlier said next week's summit was a 'defining moment' and that, without it being a success, Italy and Spain may be pushed closer to eventually needing sovereign bailouts.

He added: 'A large part of Europe would find itself having to continue to put up with very high interest rates that would then impact on the states and also indirectly on firms.

'This is the direct opposite of what is needed for economic growth.'

German chancellor Angela Merkel had been expected to resist any pressure from Monti, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy for less stringent eurozone fiscal policies or the issuance of common eurozone bonds.

But after a meeting of eurozone finance ministers late last night, International Monetary Fund chief Christine Lagarde demanded rapid progress on a number of other fronts, raising the heat on Merkel.

Respite: Dangerously high borrowing costs for Spain and Italy have eased a little on market hopes for policy initiatives at the Brussels summit on June 28/29

Lagarde said a banking union was a top priority, alongside fiscal union and the principle of mutualising debt.

Germany refuses to countenance common bond issuance and will not soften until economic union is complete.

It is also opposed to the early introduction of a bloc-wide bank deposit guarantee scheme.

While Spain's needs are most pressing - its medium term borrowing costs hit a euro era high at auction yesterday - the political stakes may be higher for Italy's unelected technocrat prime minister, Mario Monti.

With his popularity sinking, the parties that back Monti in parliament are increasingly reluctant to support his reform proposals at home, but demand he get results in the European arena to ease the pressure on Italy's recession-bound economy.

'Monti knows he has to get his ducks in a row on the European side so he can tell the parties that he's sorted that part out, and now it's their turn to help sort out Italy,' said James Walston, politics professor at the American University in Rome.

'Friday's summit is important for Monti in symbolic terms because it shows Italians that he is centre-stage.'

Though hugely popular when he came to office in November, his approval rating has halved as tax hikes and pension cuts exacerbated an already severe recession, and his labour reform estranged both unions and the business establishment.

But for the markets, Monti remains the man most likely to tackle Italy's debt mountain and uncompetitiveness.If he comes under serious threat, Italy could quickly supplant Spain as the euro zone's main flashpoint.

Warm welcome: Britain's Chancellor of the Exchequer George Osborne (left) kisses Danish Economy Minister Margrethe Vestager (right) during the finance ministers meeting today

Monti's hand was weakened by comments on Wednesday by his predecessor, Silvio Berlusconi, who said the prospect of Italy quitting the euro was 'not blasphemy' and that he failed to understand why it would hurt Italy's economy.

Berlusconi's People of Freedom party is one of the two main groups that guarantee Monti a majority in parliament.

'The best that Monti and Rajoy will get from Merkel at this meeting is talk,' said Nicholas Spiro of Spiro Sovereign Strategy.

Crucial: Italian Prime Minister Mario Monti (right) has said the summits are a 'defining moment'

However, with 10-year Spanish bond yields having already fallen by more than 0.7 percentage points from recent highs, he said that ahead of next week's summit even vaguely supportive comments from Merkel may be enough to underpin the market.

The two hour meeting will start at 12noon. It will be followed by a joint news conference by the four leaders.

No joint statement is expected.

Monti, who presents himself as a mediator between France and Germany, has insisted for months that the eurozone must temper the German-led austerity drive with measures to foster growth.

That position is shared by Hollande and Rajoy, but when the Italian leader has tried to transform his pro-growth rhetoric into policy prescriptions for the eurozone his ideas have generally met a cool response from Merkel.

He proposed on the sidelines of this week's G20 summit using the eurozone's rescue funds to buy the bonds of Spain and Italy in the secondary market to bring down their borrowing costs.

Monti will raise it again in Rome. Spain's Foreign Minister Jos Manuel Garcia-Margallo called the idea 'intelligent'.

But Merkel played down the plan, which investors said might be counter-productive unless the European Central Bank stepped in decisively in support.

Other proposals from Monti, such as stripping some forms of public investment from budget deficit calculations, or commonly issued euro zone bonds, are also broadly supported by France and Spain but opposed by Germany, at least for now.

Heat is on: IMF chief Christine Lagarde has demanded rapid progress on a number of other fronts