EU finance ministers are scrambling to ease market concerns over the health of European banks, vowing that results of tests on their ability to survive a new economic crisis would be transparent.
European officials hope results of tests on 91 banks accounting for 65% of the European banking system will reassure investors worried that some lenders may have hidden the extent of their exposure to bad debt.
Belgian Finance Minister Didier Reynders, whose country holds the rotating EU presidency, said his counterparts had agreed at a meeting in Brussels to coordinate the July 23 release of the test results.
'The desire is to do it in the most transparent way as possible, including by presenting the exposure of different institutions to sovereign debt,' he told a news conference.
'The objective is to have a presentation (of test results) that gives the greatest guarantees of credibility to the institutions,' he said.
British finance minister George Osborne said it was also crucial for EU states to have credible plans ready to assist banks in case some of them fail the tests and need fresh funds to bolster their balance sheets.
The health of the European banking sector has come under sharp focus from investors worried that they might have been hit hard by Europe's sovereign debt crisis.
Markets want full disclosure of the results and finance ministers have denied that there has been any desire to craft the tests in ways that would ensure positive scores for the banks.
Nearly all EU states now on deficit watch
The EU placed Bulgaria, Cyprus, Denmark, and Finland under its excessive deficit watch today, leaving only three of 27 EU states off the list of those breaking EU fiscal rules.
The decision by EU finance ministers meeting in Brussels leaves only Luxembourg, Sweden and Estonia off of a list of countries facing an excessive deficit procedure for budget shortfalls exceeding 3% of output.
Bulgaria and Cyprus exceeded the public deficit limit in 2009 while Denmark and Finland are expected to breach the limit, the council of finance ministers said in a statement.
The ministers called on Bulgaria and Finland to bring their deficits below the 3% limit by 2011.
The council decided to give Denmark and Cyprus more time to take corrective measures. Cyprus was given until 2012 while Denmark has until 2013.
The deadline for all other members states to take measures to reduce their decits is January 13, 2011.
Estonia gets approval to join the euro zone
European Union finance ministers have given the final approval to Estonia joining the euro zone from the start of 2011.
Estonia will become the 17th member of the single currency area after it met EU entry requirements on inflation, debt and deficit levels, interest rates and currency stability.
The Baltic country of 1.3 million people has long had its kroon currency fixed against the euro in a currency board at 15.6466 kroon to one euro.
The ministers agreed to keep that exchange rate as the final conversion rate.
