Europeans leave summit with no new strategy to deal with continent’s debt crisis

European officials ended a two-day financial summit Saturday with no new concrete plans to help support euro-area countries that are having difficulty repaying their debts, as deep divisions remained about the best course for the coming weeks and months.

On Saturday, the officials discussed but failed to agree on a proposal to tax financial transactions. Greece is likely to run out of cash by mid-October if it does not receive billions of euros of bailout money, potentially setting off a financial contagion that could hop from bank to bank and country to country.

But European officials remain undecided on whether Greece has done enough of the spending cuts and reforms that it had promised to carry out as a condition of taking the money.

Officials said Friday that a decision on Greece would probably wait until early October, disappointing investors who had hoped for earlier certainty about what could happen to the country’s debts. Markets closed up for the week as fears eased about an imminent Greek default.

The tax on financial transactions that finance ministers were discussing Saturday at a meeting in Wroclaw, Poland, could impose a small fee on a wide variety of actions, making banks contribute to the bailout fund and helping fund broader European Union services. But such a measure is strongly opposed by Britain, which fears it would harm London’s financial centers, and some officials question the effectiveness of a limited-area tax because they worry that transactions would simply shift elsewhere in the world.

“There isn’t a consensus,” the E.U. internal market commissioner, Michel Barnier, said on Saturday, the Associated Press reported. “There is no common position on this idea, no agreement in the E.U. We are only starting the debate.” The proposals estimate that the tax could raise $41 billion a year.

The bailout continued to unsettle the ruling coalition in Germany as well, where conflicts have broken out in the past week between Chancellor Angela Merkel, who has said she will do whatever it takes to support the euro, and members of her junior coalition, the pro-business Free Democrats, some of whom have suggested Greece may need to return to the drachma.

German finance minister Wolfgang Schaeuble, a member of Merkel’s Christian Democratic party, chided the Free Democrats on Saturday, saying that “the chancellor and the finance minister are responsible for the euro” — not the coalition partners who have suggested that Greece may need to have an orderly default of its debts. He added that he could not “imagine forming a coalition with a euro-skeptic party,” underlining the deep disagreements that face the government that will pay the most for any bailout.

On Friday, U.S. Treasury Secretary Timothy F. Geithner paid an unusual visit to the Poland meeting, his second to Europe in a week, in a sign of how worried the United States is about the crisis on the continent. He was received coolly — a measure of America’s troubled status in global financial affairs.

Michael Birnbaum is The Post’s Moscow bureau chief. He previously served as the Berlin correspondent and an education reporter.


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