BRUSSELS – The European Union finance ministers agreed an emergency loan package on Monday that with the support of the IMF could reach € 750 billion ($ A1, 074.3 billion) to a sovereign debt crisis spreading through the Eurozone occur. The European Central Bank also announced measures to Greece include debt crisis, said the euro would buy the government and private debt and resistance to abolition of full-scale bond purchases.
“The budgetary efforts of EU Member States, the financial support of the (European) Commission and the Member (s) actions today by the ECB, the euro, we prove it,” EU Monetary Affairs Commissioner Olli Rehn defense told a news conference after more than 11 hours of conversations.
EU finance ministers announced a package consisting of a special-purpose vehicle from the euro zone States would guarantee a pro rata basis to € 440 billion, plus a European instrument worth € 60 billion.
Clarification of previous statements, they said the International Monetary Fund was expected to contribute approximately € 250 billion.
Economists have estimated that as Portugal, Ireland and Spain three years needed to end like that bailouts received by Greece, the total cost could be € 500 billion.
“This is not just about Greece, but the stability of Europe as a whole,” said Mr Rehn.
The measures that dwarf previous attempts by the EU-27 country or a 16-state group to calm currency is Swedish Finance Minister Anders Borg described as the “Wolfpack” of financial markets.
The movements were coordinated by the European financial institutions and the discussion between the Group of Seven finance ministers, where global concerns that the problems began in Greece could cause havoc in global financial markets.
Greece, with a deficit of 13.6-14.1 percent of gross domestic product in 2009 and debt of more than 115 percent of GDP, already has provided € 110 billion, three-year loan package from the 16-country euro zone and the IMF .
The size of the transaction agreed on Sunday, two days after a summit of leaders of the euro, reflected the growing sense of urgency in the EU and around the world that a sovereign debt crisis sweeping global markets quickly.
The ministers also called for fiscal consolidation, sustainable finances, improved economic growth and closer economic coordination. Plans to fiscal consolidation and structural reforms would be accelerated if necessary, they said.
Meanwhile, the Group of 20 (G20) finance ministers have welcomed the European Union measures to ensure the stability of the euro area, including the € 500 billion crisis package protection.
“The G20 will continue to closely monitor the development of global markets and remain very committed to continue working together to maintain global financial stability,” read a statement circulated by the Japanese Ministry of Finance.
source:reuters
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