NEW YORK - The European Union's summit on Friday may not work out a framework
to boost economic growth and implement structural reforms in solving the bloc's
debt problems, economists told a symposium sponsored by the Council on Foreign
Relations, a US think tank, here on Thursday.

To tackle the worsening debt crisis, the EU leaders were scheduled to meet on
Friday to work on coordinated deals. Since Germany Chancellor Angela Merkel and
French President Nicolas Sarkozy had agreed on changing the European treaty,
some investors were optimistic about a positive outcome.

But Lewis Alexander, chief US economist of Nomura, said he was "deeply
sceptical."

"What's on the table now really doesn't address an awful lot of the
problems," because all the measures under discussion were all about austerity,
which couldn't boost economic growth, protect financial system or advance banks'
capitalization, he said.

"It doesn't fix Greece, it really only deals with the governance part of the
equation," Alexander said.

Alexander's opinion was shared by panelist Diane Swonk, chief economist of
Mesirow Financial. Swonk said austerity alone could not solve Europe's debt
problems and fundamental structural reforms were required to generate economic
growth.

"The greatest concern I have is that we get caught in a cycle of austerity
that only build your debt problem, it doesn't really clean it up," Swonk said.
"If you don't have enough growth as you try to restructure your economies, to
bring down your deficit, you will get in a very bad cycle for the region and
contraction of banks balance sheets will continue."

Many economists said that the EU summit will highly depend on the political
will of Germany and "how far Merkel wants to go." Swonk said the EU does not
lack political will, but there were great differences, even "hates" among the
member states.

Richard Bernstein, CEO of Richard Bernstein Advisors, said "we are at the
beginning of a secular period of tremendous shrinkage of bank balance sheets."
The former chief investment strategist of Merrill Lynch predicted that banks
would become smaller in the future because of the contraction in lending around
the world.