Europe and the IMF to Bail Out Greece

[Frodo]

Europe announces vast contingency fund, racing to contain crisis

By Howard Schneider
Washington Post Staff Writer
Monday, May 10, 2010

ATHENS -- European finance ministers threw a trillion-dollar protective wall around the euro on Sunday and the European Central Bank said it would begin buying government bonds if necessary as officials on the continent struggled to contain the spread of a government debt crisis that began in Greece.

After a discussion that ran into the early morning Monday, the finance ministers, the ECB and the International Monetary Fund took separate steps meant to stanch a loss of confidence in European governments that had put the world's nascent economic recovery at risk.

A joint European Union-IMF program will give the 16 nations that share the euro access to nearly $1 trillion in loans if world bond markets abandon them and demand higher interest rates. That dynamic pushed Greece to a near-default before a $140 billion bailout by the IMF and Greece's European neighbors.