Morning Market Roundup: EU Bank Prez to Save Euro, Spain's 3rd Quarter Contraction, Geithner Meets with EU Leaders

Here’s what’s important in the business world this morning:

ECB President: European Central Bank president Mario Draghi has already taken Europe's monetary authority into uncharted territory.

Now, with the debt crisis in Europe threatening further disaster, he may have to push it even farther into the unknown to save the euro.

Last Thursday, Draghi sharply raised expectations for more central bank action when he vowed the ECB would do "whatever it takes" to save the 17-country euro, and that "believe me, it will be enough." Markets jumped on the news, expecting that the bank could soon intervene in bond markets to drive down the borrowing costs that are threatening Spain and Italy.

In the days following Draghi's comments, politicians across Europe have added their voices to pledges of action for the eurozone. First came a joint statement from Angela Merkel of Germany and France's Francois Hollande, followed by another from Merkel and Italy's Mario Monti. This was followed by the head of the eurozone's finance ministers group, Jean-Claude Juncker, and German finance minister Wolfgang Schaeuble.

All eyes are on Draghi to see what the ECB can deliver.

 Spain: The Spanish economy remains stuck in its second recession in three years after contracting 0.4 percent in the second quarter of 2012 from the previous three months, according to official data.

It was the third consecutive contraction following the previous two 0.3 percent quarterly declines, Spain's National Statistics Institute said Monday.

The institute said that compared to the second quarter in 2011, the economy had contracted 1 percent. The slump was due to a fall in demand at home, offset slightly by an increase in exports, the institute added.

The government predicts the economy will contract 1.5 percent for all of this year and 0.5 percent next year.

Geithner: U.S. Treasury Secretary Timothy Geithner is to meet his German counterpart and the head of the European Central Bank following a flurry of pledges to save the euro that have raised expectations of action by European policymakers.

U.S. and German officials say Geithner will meet German Finance Minister Wolfgang Schaeuble Monday on the North Sea island of Sylt, where Schaeuble is vacationing. Geithner will then travel to Frankfurt to meet ECB President Mario Draghi.

China: China's government said Monday it will launch projects to attract private investment in energy, health and other industries as it tries to reverse an economic slump.

The Cabinet announcement adds to a flurry of efforts to stimulate growth that has fallen to a three-year low, raising the threat of job losses and social unrest. The International Monetary Fund said last week China probably has achieved a "soft landing" but warned "global headwinds are increasing" due to Europe's debt crisis and a weak U.S. recovery.

Beijing said previously that boosting private sector investment is a key part of its recovery plan but there is no sign struggling entrepreneurs are willing to spend. Some private businesspeople say monthly sales have fallen by up to 50 percent in recent months.

The Associated Press contributed to this report.