Posted May. 11, 2010 07:10,
The European Union will prepare a bailout package worth up to 968.7 billion U.S. dollars to stem its growing state debt crisis and keep the euro from collapsing.
EU finance ministers reached an agreement on an emergency fund worth up to 750 billion euros after 11 hours of negotiations from Sunday afternoon to early Monday morning.
The 16 eurozone countries will put up 440 billion euros and the European Commission will provide 60 billion euros. The International Monetary Fund also agreed to offer 250 billion euros.
The 750 billion euros is unprecedented, European Union Economic and Monetary Affairs Commissioner Olli Rehn said. This represents our will to defend the euro by any means possible.
After the EUs plan for financing arrangement was announced, Asian stock prices rose and European markets went up between 2.95 and five percent early after opening.
In preparation for a dollar shortage due to speculators attacks on the European market, the EU signed currency swaps with central banks in the U.S. and Switzerland.
Analysts say this measure is powerful enough to warrant comparison with nuclear weapons. The breakthrough came as U.S. President Barack Obama held a series of phone calls with German Chancellor Angela Merkel and French President Nicolas Sarkozy Sunday to prevent the Greek crisis from spreading throughout Europe.
Obama said EU countries must take a firm and wide range of actions to gain confidence in the European market.
The IMF board of directors approved a rescue package worth 30 billion euros for Greece Monday as part of the 110 billion euro package the eurozone and the IMF agreed to provide in assistance to Greece for three years. Eurozone countries had decided to offer a bailout worth 80 billion euros to Greece Saturday.