A Franco-German fiscal policy plan sits at center stage as the European Union's two-day summit winds downas the European Central Bank (ECB) continuing to refuse to purchase additional European government bonds.French and German leaders hope to convince their counterparts of necessary amendments to the EU Treaty.
Proposed amendments include mandatory balanced budgets for the 17 euro zone countries and not forcing private investors to foot costs of any future bailouts, á la Greece.
Negotiations between the 27 EU leaders continued behind closed doors late into Thursday evening.
Meanwhile, ECB president Mario Draghi held a firm stance on the extent of ECB actions.
The ECB did announce initiatives to assist struggling banks . The ECB cut its interest rate from 1.25% to 1% and reduced its reserve requirements from 2% to 1%, among other measures.
The 1% reduction in reserves could create as much as €100 billion in additional liquidity.
ECB's refusal to buy more sovereign bonds does not mean the bonds will not be bought. EU officials continue talks for national central banks in Europe to route €200B in loans through the International Monetary Fund.
The market is already on edge as traders worry that the measures taken will not be robust enough to stem the crisis. The DJIA fell nearly 200 points, ending just under 12,000 at 11997.70. The euro ended the day down 0.54% at $1.33.
Meanwhile, sovereign bonds over all fared poorly as well. Italian 10-year bond remained the continent's pain point, with yields closing at 6.472%. Spanish yields climbed to 5.708% and French and Australian yields climbed as well.