News / Europe

EU Strengthens Economic Rescue Efforts

Multimedia

Stock markets and the euro currency rebounded on news of an enormous European Union rescue package to combat a growing financial crisis in the region.  The plan, combined with support from the International Monetary Fund, is worth about a $1 trillion.

Global markets and the euro rallied, buoyed by the news of the plan announced by European Union finance ministers in Brussels.  The rescue package includes $75 billion in loans to troubled members available from the European Commission, the E.U. executive arm.

Another $570 billion would come through bilateral loans from members of the 16-nation eurozone.  If necessary, the International Monetary Fund could also kick in as much as half of the total E.U. contribution.

At a news conference in Brussels, European Monetary Affairs Commissioner Olli Rehn said the agreement sent a clear signal of European support for the decade-old euro currency.

"All in all, with the fiscal efforts by E.U. member states, the financial assistance of the [European] Commission and by the member states and the actions taken to date by the [European Central Bank] proves that we shall defend the euro, whatever it takes," said Rehn.

In Paris, French Finance Minister Christine Lagarde said she was pleased at news of the surging markets.

Lagarde told Europe-1 radio the new stabilization plan was the result of unprecedented coordination by major financial players, including the European Central Bank, the G-7 and the G-20.  She said it sent a signal the euro would resist.

Markets plummeted last week, reflecting fears that Greece's fiscal crisis could spread to other vulnerable European nations.  The situation was so serious that European leaders called for the new rescue package to be in place by the time stock markets opened Monday.

Analysts have faulted the European Union for not taking swift, bold action to staunch the spreading panic.  Karel Lanno is chief executive for the Center for European Policy Studies in Brussels.

"We have been calling for action, the creation of a stability fund since February," he said.  "Now we are three months later and they have finally put it into motion - meaning a lot of damage has been done in the meantime.  They could have acted much earlier," said Lanno.

At a forum in Brussels, permanent E.U. President Herman van Rumpoy said the rescue package is only a first step.

"Our problem is that inside the eurozone there are huge problems in economic development," he said.    And we have to tackle these divergences [by] having more convergence in economic policy and economic development.  And that is why we have to make more effort in the coming years to tackle those divergences,"  van Rumpoy  said.

But he says the eurozone is financially healthy.

"The eurozone has fundamentals, which are sound, compared to other countries.  Our budget deficit is almost half of what is going on in other important countries in the world economy.  Second, we have a balance of payments that is almost in balance," said van Rumpoy.

Analyst Lanno says what is needed is a more comprehensive strategy to prevent future crises.

"We need to have a holistic approach of the economic governance of the eurozone.  It is not only this thing [the rescue plan] - it requires a whole redesign of how the institutions function, what ito be done at the macro level, the micro level," Lanno said.

Lanno believes it will be several years before the European Union recovers from the crisis and can show the markets it is in control of its finances.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Religion Aside, Christmas Gains Popularity in Communist Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid