Oct.14 - How to fund Europe's failing banks is one of the key issues at a meeting of euro zone finance ministers. But as Ciara Sutton reports despite signs of recovery in Europe there are plenty of other lingering concerns?
They might not be hitting the financial headlines - the US debt ceiling crisis is taking care of that - but the euro zone's finance ministers aren't sighing with relief quite yet. European Commission head Olli Rehn. (SOUNDBITE) (English) EUROPEAN COMMISSION HEAD, OLLI REHN, SAYING: "I think it's very important that the United States overcomes its fiscal gridlock. Otherwise we would have potentially dramatic consequences in the world economy and also have negative ramifications on the recovery in Europe." The eurogroup has its own gridlock to resolve - how to pay their broken banks' repair bill. The ECB's health checks next year are expected to uncover deep holes. Even the IMF has hinted the problem could be enormous. Spanish and Italian banks are facing losses of 230 billion euros - and that's just from credit to companies over the next two years. Banking union is the ultimate goal - but that's still not imminent. Britain is refusing to sign off on the first stage, allowing the ECB to monitor banks. Other countries are also worried about who will pay for any holes in balance sheets. ING's Senior Economist Carsten Brzeski. (SOUNDBITE) (English) ING'S SENIOR ECONOMIST, CARSTEN BRZESKI, SAYING: "We've seen a lot of opposition from the German's so far. But this whole thing could be the final missing link in the banking union. They'll probably not finish it today. But once we have a German government in the coming weeks or month, then this is an issue that has to be resolved." With the euro zone barely out of recession, a banking union isn't the only concern for leaders. Issues in the region's southern economies remain on everyone's radar, says Angus Campbell from FXPro. (SOUNDBITE) (English) ANGUS CAMPBELL, MARKET ANALYST AT FXPRO, SAYING: "Greece of course remains in quite a bit of difficulty. It's going to have to almost certainly need another bailout next year. And so the Greece situation hasn't quite been resolved yet." But there are signs of recovery - August saw the strongest expansion in euro zone output for two years. And Ireland could soon be the first country to exit an international bailout - with Spain not far behind.