Europe calls for 750 billion euro

Afp May 10, 2010

BRUSSELS: Europe on Monday agreed a package of crisis aid for troubled eurozone countries that Spanish finance minister Elena Salgado said could hit 750 billion euros with IMF involvement.

As the official announcement came through, the euro surged to 1.2907 dollars in Asian trade, up from 1.2755 dollars in New York late on Friday.

The fund would be made up of 440 billion euros from eurozone countries and another 60 billion euros of loan funds coming from the European Commission, with another 250-billion-euro facility added into the mix by the IMF.

Salgado and EU economic and monetary affairs commissioner Olli Rehn had initially said that IMF input would be of the order of 220 billion, but later said that the Washington lender would add half as much again as Europe.

The IMF's executive board approved a record 30-billion-euro loan Sunday for Greece, whose debt woes have shaken global financial markets.

The monster bailout "proves that we shall defend the euro whatever it takes," the European Union's commissioner for economic and monetary affairs, Olli Rehn, told a press conference after 11 hours of marathon Brussels talks.

The European Central Bank will also implement exceptional measures in support of a monster euro bailout package, Rehn said.

Japanese share prices also opened slightly higher, with the benchmark Nikkei-225 index gaining 34.46 points, or 0.33 percent, to 10,399.05 in the first minutes of trading.

"Germany put a proposal for a total of 500 billion euros (645 billion dollars) on the table," the source said, which would be made available to any cash-strapped eurozone nation.

The total would include 60 billion euros of loan funds from the European Commission coffers -- a sum which has been discussed in recent days -- as well as 440 billion euros which would come, if necessary, from members of the 16-nation eurozone and the International Monetary Fund.

The package would include "bilateral loans, loan guarantees and IMF credit lines," according to the diplomatic source.

If the plan were to be agreed, as EU finance ministers held late-night talks in Brussels, the facility would be unprecedented.

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