EU Crisis Plan May Feature Portugal Aid, Buybacks, Debt Rules
By - Jan 12, 2011 10:17 AM GMT-0200
European governments are considering aid for Portugal, debt buybacks, lower interest rates on rescue loans and guarantees against excessive debt as part of a package to quell the financial crisis, according to two people with direct knowledge of the talks. The plan, which may include a loan to Portugal of about 60 billion euros ($78 billion) and purchases of outstanding Greek debt, would mark an attempt to contain a crisis that has frustrated unprecedented efforts by policy makers to calm markets and raised questions about the health of the 17-nation euro economy.
Euro-area finance ministers will discuss elements of the package next week, though the debate is so sensitive in Germany that decisions may wait until a scheduled summit of political leaders on Feb. 4, said the people, who declined to be named because the deliberations are private.
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Comment: Euro authorities are determined to save the euro. That has been my thesis from the beginning of the euro crisis almost a year ago. In the meantime euro authorities have invested so much prestige and funds that it doesn't need willingness. Saving the euro has become a necessity.
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