EU to fend off market ‘wolves’ in Greek crisis

BRUSSELS (Reuters) – European Union finance  ministers yesterday pro-mised to counter the “wolfpack” of the  financial markets as they sought agreement on a 600 billion  euro ($805 billion) plan to keep Greece’s debt crisis from  spreading.

The compromise measure under discussion included loan  guarantees by euro zone countries worth 440 billion euros, a 60  billion euro stabilization fund and a 100 billion euro top-up  of International Monetary Fund loans, EU sources said.

Financial markets have been punishing heavily indebted euro  zone members, threatening to plunge them into Greece’s plight.  The safety net being assembled was meant to protect other  countries with bloated budgets, such as Portugal, Spain and  Ireland.

Jitters over euro zone finances have set global markets on  edge, and provided a backdrop for a nearly 1,000-point drop in  the Dow Jones industrial average on Thursday, whose trigger  remains a mystery.
Hopes the EU package would successfully tackle the crisis  helped lift the euro, which gained almost 2 per cent against the  US dollar and 3 per cent on the yen in early Asia trade. US  stock futures also surged at the start of trade yesterday.

Moving swiftly to bolster Greece and instill some  confidence in shaky markets, the IMF approved a 30 billion euro  rescue loan as part of a broader combined EU-IMF bailout for  the country totaling 110 billion euros.

The IMF said 5.5  billion euros from the three-year loan would be disbursed  immediately.
To secure the funds, Greece has committed to budget-cutting  measures so sharp that they have already caused violent  protests.

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