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Berlin tempers summit hopes, banks under pressure

• Reuters

German Finance Minister Wolfgang Schaeuble told a conference in Duesseldorf that European governments would adopt a five-point plan at the Brussels meeting to address the turmoil that has clouded the outlook for the global economy.

This is expected to include a plan to recapitalize banks and reduce Greece's debt mountain by asking the country's private creditors to accept steeper writedowns on their holdings than the 21 percent losses agreed last July.

But Schaeuble cautioned that the meeting would not yield a "definitive solution" for the crisis that started in Greece two years ago and has since spread across the 17-nation bloc, leading some experts to predict a breakup.

His comment weighed on the euro, which fell one percent against the dollar after hitting a one-month high earlier in the day. European stocks also fell.

Ahead of a 48-hour general strike in Greece that is expected to bring the country to a standstill just as parliament votes on a new set of controversial austerity measures, Greek Prime Minister George Papandreou appealed for unity. "This is maybe the most crucial week for Greece and Europe," he said during a meeting with the Greek president.

Hours later, however, a deputy from Papandreou's party quit his seat in protest against what he called "unjust" steps. The lawmaker will be replaced by another socialist, so Papandreou's four-seat majority in the 300-strong assembly is unchanged.

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