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Worldcrunch

IL SOLE 24 ORE (Italy), DIE WELT (Germany) BBC NEWS (UK), LE MONDE (France)

BRUSSELS - Spain and Italy...Spain and Italy.

Sports junkies know by now the lineup for the finals of the 2012 European Soccer Championship, after Italy defeated the favored Germans 2-1 in Warsaw on Thursday night, following Spain's semifinal win over Portugal in a shootout.

But political junkies saw the real European showdown taking shape at a key Brussels summit where German Chancellor Angela Merkel was facing growing pressures into the wee hours of Friday to cede to demands of euro-zone partners -- notably Spain and Italy -- on restructuring of a massive bailout fund.

Le Monde reports that Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy told their partners they would refuse to go forth with the overall 120 billlon euro growth package until they obtained guarantees on limiting their borrowing costs.

In exchange for the deal, the countries agreed on a European Central Bank supervision of banks, conforming to Merkel's wish that Brussels have more control over euro-zone country finances. Once the supervisory system is set in place by the end of this year, the European Stability Mechanism will be able to directly recapitalize banks without passing through governments, thus avoiding additional national debt.

Still, German daily Die Welt concluded that the German leader had been outflanked, posting the Friday morning headline "Merkel's Defeat On A Historic Night."

French President François Hollande provided key support for Italy and Spain, according to BBC News. "I'm here to try to find rapid solutions for those countries facing pressure from the market, despite having made huge efforts to balance their budgets," Hollande said.

The euro rose against the dollar Friday on Asian markets after the summit, as did stocks in Germany and the United Kingdom.

Milan financial daily Il Sole 24 Ore reported that the Brussels summit was a clear victory for Italian Prime Minister Mario Monti. But most of Italy was focused on the other "Super Mario" - 21-year-old striker Mario Balotelli - who scored twice (see below) on the way to the Italian team's 2 - 1 victory over Germany. Italy will meet Spain in the finals Sunday in Kiev.

Photo Credit: Emanuele Dal Carlo - http://www.emanuele.dalcarlo.it/

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