‘Shock and awe Part 2 and in 3-D’
The new package comes with major strings attached
AS IT BECAME CLEAR the first €110bn bailout package for Greece wouldn’t be enough to stop the rot in the Eurozone, authorities in Europe and the United States worked frantically over the weekend of 9 May and came up with a new €750bn plan.
The main reasons the first bailout failed to calm market jitters were fears it didn’t go far enough for Greece, which is in dire straits, and that other countries – such as Spain and Italy – would also succumb. The main problem is that those countries have budget deficits of more than 9% of gross domestic product and the markets no longer want to finance their debt.
But after frantic negotiations, the Eurozone’s 16 finance ministers unveiled a package that pledged to guarantee the debt of any of the countries that use the euro. London’s Daily Telegraph reported the unprecedented measures include: €440bn in loans or guarantees from Eurozone countries, €60bn from the European Union’s budget and up to €250bn from the International Monetary Fund.
News of the new package broke in the early hours of 10 May