Germany pessimistic over success of summit

BERLIN (AP) — Germany suggested Wednesday that European leaders could fail to agree on a plan to tighten the continent’s economic ties by the end of the week, dampening investors’ optimism about a broad resolution of Europe’s debt crisis.

Instead, a senior German official said it could take until Christmas for changes to the European Union treaty to be agreed upon, a critical first step in saving the euro.

It is unclear whether the leaders have that long, as ratings agencies have warned of a possible credit downgrade of 15 European countries unless they quickly build a firm plan to solve the continent’s two-year-old debt crisis.

Markets turned lower after the German official’s comments, dampening the optimism that had seen stocks and bonds rally over the past week. Investors had been hoping that a promise of more enforceable rules on budgets would permit the European Central Bank to take bolder action to reducing borrowing costs for Italy and other struggling countries.

Germany’s main stock index fell 1.1 percent, while the Dow futures were down 0.4 percent and the euro shed 0.3 percent to $1.3358.