EC's Rehn: Next three days crucial for euro zone (by MarketWatch)

LONDON (MarketWatch) - Olli Rehn, the vice president of the European Commission, said Friday during a panel discussion at the World Economic Forum in Davos, Switzerland, that the "next three days will be very crucial for the future" of the euro zone. Rehn said that Greece was close to agreeing a deal with its private creditors. Athens is trying to secure another installment of EU bailout funds to help it avoid going bankrupt, but the nation needs to reduce its current debt with private lenders. Rehn said: "This will be a very important three-day period for reinforcing confidence in the euro zone." World leaders taking part in the summit at the Swiss ski resort are continuing to debate the future of the euro zone, capitalism and related economic topics.

Geithner urges bigger financial firewall in Europe (by Polya Lesova)

DAVOS, Switzerland (MarketWatch) -- U.S. Treasury Secretary Timothy Geithner said on Friday that the "unfinished piece" of resolving the euro-zone sovereign debt crisis is "building a stronger, more credible firewall." If Europe commits to building a bigger firewall, the International Monetary Fund and nations contributing to it will be very supportive in those efforts, but not "as a substitute," Geithner said at the annual meeting of the World Economic Forum in Davos. The outlook for U.S. growth and unemployment depends on the resolution of the European crisis, developments in the Gulf because of oil supplies, and "whether Republicans decide to legislate things that are good for growth," according to Geithner. The Treasury secretary said there's "no merit" to the argument that regulations pursued by the Obama administration in various sectors have stifled business investment. "We recognize that these reforms are tough," but there isn't any evidence that they are hurting the economy, Geithner said.

Juncker: Euro members may need to aid Greece more (by MarketWatch)

FRANKFURT (MarketWatch) -- Euro-zone members may have to waive part of Greece's debt as private investors prepare to take a hit on their holdings of Greek bonds, Jean-Claude Juncker, head of the Eurogroup of euro-zone finance ministers, said in a newspaper interview published Friday. If Greece is shown to be able to get its debt load on a sustainable footing and reaches an agreement with the private sector on haircuts, "then the public sector will have to ask if it cannot provide assistance," he said, in an interview with Austria's Der Standard. Juncker had no comment on calls for the European Central Bank, which holds an estimated 40 billion euros or more of Greek debt, to also accept write-downs. "The central bank is independent, and it is not appropriate for the president of the euro group to make recommendations to the monetary authorities," he said.

Euro-zone money supply, loan growth slows in Dec. (by William L. Watts)

FRANKFURT (MarketWatch) -- Data measuring broad money supply and private-sector loans in the euro zone both showed slowing growth in December, the European Central Bank said Friday. Loans to the private sector grew at a 1% annual rate in December, down from 1.7% in November and 2.7% in October. Economists had forecast growth of 2.1%. M3, the broadest measure of money supply, saw annual growth slow to a 1.6% pace in December, down from 2% in November. The three-month average of annual M3 growth slowed to 2.1% from 2.5% in the September-to-November period.