Lagarde: 'Good progress' made on resolving debt crisis

IMF chief Christine Lagarde says European leaders have made "very good progress" on plans to resolve the eurozone debt crisis.

During a six-hour summit in Brussels yesterday Europe's leaders agreed to change the EU treaty if necessary to help resolve the crisis and stop the region sinking into recession.

The French and German leaders announced last night that the group had come to a broad agreement on resolving the crisis, including the expansion of the European Financial Stability Facility.

Last night as the 10 non-eurozone EU leaders left the talks, the next phase of the marathon began – negotiations between the 17 remaining eurozone leaders on the other two key parts of the economic revival package: a massive increase in EU bailout funds and a 50% write-down of Greek debt repayment.

Matina Sevis from the Wall Street Journal says the focus is now firmly on the next meeting in two days' time.

"Wednesday's summit will be the final one, which will produce what they have been calling a 'comprehensive solution' to the eurozone problem."

Meanwhile it has emerged that yesterday's summit saw a furious row break out between Nicholas Sarkozy and David Cameron.

The French president said he is "sick" of the British Prime Minister giving European leaders advice on how to solve the single currency's debt crisis.

The row erupted after Mr Sarkozy tried to insist that a follow-up meeting on Wednesday should be restricted to the 17 eurozone leaders.

At one point in the exchanges, the French president was quoted as telling Mr Cameron: “We are sick of you criticising us and telling us what to do.

“You say you hate the euro and now you want to interfere in our meetings.”

In the end, however, Mr Cameron won his battle to ensure that all 27 member states would attend Wednesday’s meeting.