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EU TO FEND OFF MARKET "WOLVES" IN GREEK CRISIS


Published: 5/9/2010 5:11:11 PM
By:
TradingEconomics.com, Reuters 

European Union finance ministers on Sunday promised to counter the "wolfpack" of the financial markets and defend the euro as they held an emergency meeting on ways to keep Greece's debt crisis from spreading.


The European Commission was presenting a proposal for a stabilization mechanism intended to provide a multibillion- euro safety net for other euro zone countries with bloated public finances such as Portugal, Spain or Ireland.

Financial markets have been punishing euro zone members with high deficits or debts as well as low economic growth, threatening to plunge them into Greece's plight.

The International Monetary Fund on Sunday approved a 30 billion euro ($40 billion) rescue loan for Greece, part of a broader combined EU-IMF bailout totaling 110 billion euros ($147 billion) over three years.

To secure the funds, Greece has committed to budget austerity measures so sharp that they have already caused violent protests.

But whether the coordinated international actions would settle global markets, which have been roiled in recent days, remained to be seen. Policymakers around the globe have become worried about the knock-on effects should the crisis spread.

Economists estimate that if Portugal, Ireland and Spain -- three other heavily indebted euro zone countries -- eventually come to require bailouts similar to Greece's, the total cost could be some 500 billion euros.

EU sources said the European Commission would ask the bloc's finance ministers to extend an existing aid mechanism for non-euro zone countries to nations in the single-currency area.

The Commission will also ask them to raise the existing amount available under the mechanism, called the balance-of-payments facility, by 60 billion euros ($80.5 billion). The maximum available now is 50 billion euros.

The 60 billion euro top-up would be guaranteed by all 27 EU members and the loans, if paid out to an EU member, would carry conditions set by the International Monetary Fund, one EU source said.

As an additional measure for euro zone countries only, the Commission will propose a separate mechanism of intergovernmental loans, the source said.

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Economic Indicators Table


CountryGDP Billion US$GDP GrowthInterest RateInflationUnemploymentCurrent Account
United States 142561.60%0.25%1.20%9.60%-109
Euro Area 124561.00%1.00%1.60%10.00%-25
Japan 50680.10%0.10%-0.90%5.20%1047
China 490910.30%5.31%3.30%4.20%53600
Germany 33472.20%1.00%1.20%7.60%2
France 26490.60%1.00%1.90%10.00%-3
United Kingdom 21751.20%0.50%3.10%7.80%-10
Italy 21130.40%1.00%1.80%8.50%-4393
Brazil 15721.20%10.75%4.60%7.00%-5180
Spain 14600.20%1.00%1.90%20.00%-5
Canada 13360.50%0.75%1.80%8.00%-11
India 12968.80%4.50%13.73%7.32%-13
Russia 12315.20%7.75%5.50%6.80%33318
South Korea 9291.50%2.25%2.60%3.70%5038
Australia 9251.20%4.50%3.10%5.30%-5640
Mexico 875-0.35%4.50%3.64%5.51%-1
Netherlands 7920.90%1.00%1.60%5.50%12372
Turkey 6170.10%6.50%7.58%11.00%-2997
Indonesia 5402.80%6.50%6.22%7.41%1554
Switzerland 5000.40%0.25%0.30%3.90%20
Belgium 4690.70%1.00%2.57%8.60%-1
Poland 4300.50%3.50%2.00%11.40%-1064
Sweden 4061.20%0.50%1.10%8.80%64
Austria 3850.90%1.00%1.80%3.90%1073
Norway 382-0.10%2.00%1.90%3.60%97648
Saudi Arabia 3690.60%2.00%5.51%10.50%22765
Greece 330-1.50%1.00%5.50%11.00%250
Venezuela 3149.70%17.98%30.90%8.40%7181
Denmark 3100.50%0.75%2.30%4.20%8
Argentina 3093.00%9.93%11.20%8.30%-365
South Africa 2864.60%6.50%4.20%23.20%-116132
Thailand 2643.80%1.50%3.40%1.54%681
United Arab Emirates261-2.10%1.80%11.10%20.60%82
Finland 238-0.40%1.00%1.10%8.50%1
Colombia 2311.30%3.00%2.24%12.80%-1396
Portugal 2280.20%1.00%1.80%10.60%-2057
Ireland 2272.66%1.00%-0.10%13.70%-1622
Hong Kong 2152.40%0.50%2.80%4.60%26
Israel 1951.17%1.75%2.40%7.20%1584
Malaysia 192-2.60%2.75%1.90%3.70%30449
Czech Republic 1900.80%0.75%1.90%8.70%621
Singapore 18224.00%0.03%3.10%2.30%14942
Pakistan 1672.00%13.00%12.69%5.50%-1548
Chile 1644.30%2.00%2.30%8.50%47
Hungary 1290.00%5.25%4.00%11.10%344
Peru 12711.92%2.50%1.82%7.60%267
New Zealand 1250.60%3.00%1.80%6.80%0
Luxembourg 52-2.60%1.00%2.47%5.30%1858
Slovenia 48-0.50%1.00%2.10%10.50%-79
Iceland 120.60%8.00%4.80%7.60%-27

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