Monday, June 7, 2010

Euro zone countries implement mega bailout fund

LUXEMBOURG (AP) -- Eurozone nations on Monday started setting up a massive bailout fund that could rescue any member of Europe's currency union from default, aiming to soothe market jitters that have sent the euro to a new four-month low against the dollar.
The "shock and awe" financial rescue package from the European Union and the International Monetary Fund will total euro750 billion ($1 trillion) -- money that can be lent to any indebted eurozone nation risking default, and intended to counter investor fears that Spain, Portugal or others could follow Greece in requiring a bailout to meet debt repayments.--
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Comment: The fund is meant never to be used to the full. The real test will come when indeed a country needs a complete bailout. Either the plan succeeds and the countries close to bankruptcy adjust or the whole of Europe goes down the drain with dramatic effects on the rest of the world.

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