EU Crafts $962 Billion Show of Force to Halt Euro Crisis
By James G. Neuger and Meera Louis
9 May 2010
May 10 (Bloomberg) -- European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases as they spearheaded a global drive to stop a sovereign-debt crisis that threatened to shatter confidence in the euro.
Jolted into action by last weeks slide in the currency and soaring bond yields in Portugal and Spain, the 16 euro nations agreed to offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank will counter severe tensions in certain markets by purchasing government and private debt.
The message has gotten through: the euro zone will defend its money, French Finance Minister Christine Lagarde told reporters in Brussels early today after the 14-hour meeting.
Under pressure from the U.S. and Asia to stabilize markets, the European governments gambled that the show of financial force would prevent a sovereign-debt crisis and muffle speculation that the 11-year-old euro might break apart.
The two-pronged offensive pushed up the euro 1.4 percent to $1.2931 as of 11:12 a.m. in Tokyo. The Nikkei 225 Stock Average climbed 1.3 percent to 10,499.25.
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