Monday, May 10, 2010

Another rescue package: 750 bn to extinguish the flames of Greece

European ministers plan a €750 bn aid to strengthen the European economy.

Today, May 10, European ministers of economy and Ecofin ( Economic and Financial Affairs Council ) have agreed another 'rescue package' for Europe. This package will help to stop the currently spread of Greece crisis to other European countries (and non-European too), as bailout to countries heading to bankruptcy. On the other hand, the states with economy issues will commit to accelerate the public debt decrease.

This agreement was signed after eleven hours of conversations between 27 ministers, and EU will contribute with €500 bn while IMF will contribute with €250 bn, making a total of €750 bn ($975bn) to attend Eurozone countries, specially Spain and Portugal.

European Central Bank would buy public debt to stabilize markets, also.

Obama asked Angela Merkel and Sarkozy (Germany and French PMs) to take measures to stabilize markets and build trust.

Even this package will be activated in "some weeks", generated enough 'hype' to lead a great recovery of worldwide stock market, as you see below. Let's hope isn't just, 'hype'.

Click to enlarge. Font: CNN

Will last longer the good run thanks to the stability of a 'money cushion' or not? Comment it.

Related Articles:

Top 5 economic news, May 3-9 week, 2010

May 3rd - 9th week most important economics news compilation:

1) Wall Street: Dow Jones stocks fall nearly 10 pct

Due a (so-called) computer error, Dow Jones lost almost 1,000 points in less than 15 minutes. Later, Dow Jones recovered and finally 'only' lost one third of the original lose, almost 300 points. And the computer error wasn't a 'computer' mistake, but human one.

2) U.S Federal Reserve opens credit line to Europe

U.S. Federal Reserve, among some banks (Bank of Canada, European Central Bank, etc...) , are involved in dollar swap effort to help European economy. In this dollar swap, dollars are shipped to European Union through foreign central banks and, in turn, these central banks lends the dollars to countries that are in need of dollar funding to stabilize EU.

3) Greek €110 bn bailout arrives

Finally. 'rescue package' arrives at Greece. Would be enough to stop Greek crisis? Or will it spread further, damaging Europe?

4) Global globalization, global crisis

Global stock markets have dropped due Greece crisis, halting global economy recovery.

5) 12 Russians miners killed, dozens missed

Not related to economy, but an important and sad one. Two explosions at the largest underground coal mine at Raspadskaya, Russia, killed 12 miners and 83 were trapped inside. Poor safety standards, probably the cause of the incident.

Have you any other important new?