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Eurozone solution 'needs credibility with markets'

Eurozone leaders are facing more pressure from the credit-rating agencies to find a lasting answer to the region's debt crisis.

One agency, Fitch, says it is considering a downgrade of six countries - among them Italy and Spain - after concluding that a solution is beyond reach.

The former Conservative chancellor, Lord Lamont, told Today presenter Evan Davis that urgent action was needed to resolve the crisis. "There isn't time left. Italy and other countries cannot go on with interest rates on their bonds near to seven percent. At some point there's going to be a real crisis.

"One of the big dangers in this situation is the longer it goes on the more likely it is that a big financial institution somewhere is going to get in trouble because of its holding of sovereign bonds: this is going to happen if a crisis solution is not found very soon."

But Elmar Brok, a German member of the European Parliament for Angela Merkel's CDU party, said he was confident a solution would be reached. "You see how problematic it is to find a position of majority within a country; how more difficult it is to do it between countries," he told the programme.

"But I think the crisis is so dangerous for everyone, within the euro or outside the euro, that we should find a solution that has credibility with the markets."

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