$1 trillion in aid - Macleans.ca

$1 trillion in aid

Cash bailout settled on as financial crisis continues in Greece, Portugal, Spain and Ireland

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Marathon talks have resulted in a $1 trillion aid package from the IMF, central banks and the European Union to stabilize the world financial markets in the wake of the Greek debt crisis. It’s the largest payout since the recession struck two years ago following the collapse of Lehman Brothers. The U.S. Federal Reserve has also reopened currency swap lines and the European Central Bank is offering to buy government debt in further efforts to calm investors. So far it’s working. The euro has already risen 2 per cent, and stock markets in Asia, as well as European shares, credit default swaps, and insurance-like instruments to hedge against default are stabilizing. “We shall defend the euro whatever it takes,” said EU Monetary Affairs Commissioner Olli Rehn at a news conference. And It might take a lot—experts warn that the ongoing problems in Portugal, Ireland and Spain could require another 500 billion euros in bailouts.

Vancouver Sun

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