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Rescue package finalized in Eurozone

06-08-2010 11:08 BJT Special Report: Europe's Debt Crisis |

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Finance ministers from the 16 eurozone countries have agreed on the final details of a 750-billion euro rescue package designed to contain a spreading debt crisis.

Monday's talks also led to the launch of the European Financial Stability Facility -- a company that may borrow euros on the market for troubled members of the currency bloc. Niu Yun has more.

The European Financial Stability Facility was created to prevent other countries that use the single currency from suffering similar problems to those of heavily indebted Greece.

The company, a special purpose vehicle, or SPV, will be able to borrow up to 440 billion euros on the market by issuing bonds guaranteed by eurozone states.

The Facility forms the largest component of the 750-billion euro rescue package agreed by EU Finance Ministers in May. The deal also stipulates that the European Commission will raise 60 billion euros, while the International Monetary Fund contribute the remaining 250 billion euros.

The IMF's Managing Director says the European Financial Stability Facility should help restore market confidence, and bring the euro `back to normal` levels.

Dominique Strauss-Kahn, IMF Managing Director, said, "The Europeans are going to complete the EFSF. It's a good step forward and so, of course, it takes time, because you know when you have many governments around the table, we can't expect decisions to be made. Political decisions can be made in a meeting, but then the technical things take time, it's just normal. Markets have to understand this, and to understand that the commitment of the euro zone countries, and with the help of the IMF is really a strong one. So I think after some times, things will come back to normal."

President of Eurogroup and Luxembourg Prime Minister Jean-Claude Juncker (L) and Managing Director of International Monetary Fund (IMF) Dominique Strauss-Kahn take interviews before the Eurozone financial ministers' meeting starts in Luxembourg, June 7, 2010. Finance ministers of the 16-member Eurozone are meeting here on Monday to finalize details of the rescue package agreed about one month ago to assure markets rattled by the European debt crisis. (Xinhua/Wu Wei)
President of Eurogroup and Luxembourg Prime Minister Jean-Claude Juncker (L) and 
Managing Director of International Monetary Fund (IMF) Dominique Strauss-Kahn take 
interviews before the Eurozone financial ministers' meeting starts in Luxembourg, 
June 7, 2010. Finance ministers of the 16-member Eurozone are meeting here on Monday 
to finalize details of the rescue package agreed about one month ago to assure 
markets rattled by the European debt crisis. (Xinhua/Wu Wei)

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