‘Shock and awe Part 2 and in 3-D’

The new pack­age comes with ma­jor strings at­tached

Finweek English Edition - - Coverstory -

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

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