Financial Post StaffÂ Dec 8, 2011 â€“ 11:18 AM ET| Last Updated: Dec 8, 2011 1:53 PM ET
All eyes will be on Europe Friday when leaders meet in their eighth crisis summit of the year to try to resolve the regionâ€™s crippling debt crisis and save the euro zone.
The sense of urgency from within Europe and without has never been greater.
Stay with us today as we bring you the latest developments and analysis leading up to this crucial summit, which begins Thursday night in Brussels.
First up Thursday was the European Central Bankâ€™s decision to cut its benchmark rate by a quarter-point to 1%, and introduce fresh measures to ease the regionâ€™s credit squeeze.
Read the full story on the rate cut here: ECB cuts rates to record low
While the rate cut was widely expected, global markets had hoped ECB president Mario Draghi would aggressively ramp up its bond-buying program and allow the eurozone to lend money to IMF so it can help fight the eurozone debt crisis.
No such luck. Mr. Draghi offered Europe unlimited cash for three years and lowered collateral requirements, but he played down expectations the central bank would dramatically increase its debt crisis-fighting measures and revealed the vote to cut rates was not unanimous.
Read the full story here: ECB cool on more bondÂ buying
The euro turned negative in response and Italian government bond yields rose. Find out more about the market’s reaction at Opening Bell
Lobbying for the summit started early Thursday at a meeting of European conservative party leaders in the French port city of Marseille.
French President Nicolas Sarkozy told leaders that they wonâ€™t get a second chance.
â€œNever has the risk of Europe exploding been so big, he said.
â€œThe diagnosis is that the euro, which should inspire confidence, is not inspiring this confidence, the French leader said. â€œIf there is no deal on Friday, there will be no second chance.
Meanwhile, European Commission Jose Manuel Barroso echoed the late U.S. President John F. Kennedy as he appealed to leaders top put aside sharp differences.
What I expect from all heads of governments is that they don”t come saying what they cannot do but what they will do for Europe. All the world is watching us and what the world expects from us is not more national problems but European solutions.
Read the full story here: Cracks emerge ahead of â€˜crucialâ€™ summit
Europeâ€™s leaders are not the only ones warning that the stakes are high.
A note from UBS economist Larry Hatheway on Wednesday spells out why he and his colleagues at the bank believe a eurozone collapse would result in of the world scenario. It makes for some grim reading. UBS advise for a euro collapse: â€˜tinned goods, small caliber weapons
Today, the Bank of Canada in its Financial System Review left no doubt as to the gravity of the situation. The bank said risks to Canada’s financial stability rose sharply in the second half of the year largely because of the European sovereign debt crisis, even though domestic banks remain stronger than in most other countries.
Hereâ€™s their graph showing Europe as a red alert:
Read the story here: Bank of Canada signals red alert for Europe debt crisis
This news breaking now:
The International Monetary Fund will participate in efforts to provide a crisis response, IMF Managing Director Christine Lagarde says.
MARKETS AT MIDDAY
Investors are still not happy about European Central Bank President Mario Draghi saying remarks he made last week were misinterpreted and that the bank would not increase its …Continue reading: Make or break time for the euro