Eurozone bailout bid starts to take shape
Stock exchanges are braced for another potentially turbulent week amid reports of a 3tr euro bailout package.
A plan to rescue the euro, costing up to 3tr euros (£2.6tr), could be revealed within days, according to several reports. It is believed to involve beefing up the European Financial Stability Facility (EFSF) and an injection of funds into a number of continental banks.
The plans would lead to an orderly default by Greece but allow the country to remain within the eurozone in a bid to relieve some of the economic pressure on Spain and Italy.
It is believed the plan could mean a 50 per cent write-down of Greece’s government debt, which is currently running at around 340bn euros (£297bn).
After its meeting on Saturday, the IMF sought to reassure markets with Managing Director Christine Lagarde, saying there had been a “common diagnosis and a shared sense of common purpose”.
“There was a dialogue and there was a clear response,” she told a press conference, including the IMF ensuring it was “fully involved”.
Share prices tumbled around the world last week amid mounting frustration at the failure of eurozone countries to act to resolve the Greek debt crisis which is threatening to fuel global turmoil.
Six weeks to save the euro? More like six days, blogs Faisal Islam
