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Will the EU stability package work?

09:24 UK time, Monday, 10 May 2010

EU finance ministers have agreed on emergency measures worth 500bn euros (£430bn) to prevent the Greek debt crisis from speading. Will these measures stop the crisis from affecting other countries?

The 16 members of the single currency bloc will have access to 440bn euros of loan guarantees and 60bn euros of emergency European Commission funding. The International Monetary Fund will also contribute up to 250bn euros.

Economic Affairs Commissioner Olli Rehn said the agreement proved "we shall defend the euro whatever it takes".

Should large loans be used to support eurozone countries in debt? Are you in Greece - do you welcome the EU's intervention? What impact will the bail-out package have on people in Greece and the economies in other eurozone countries?


This debate is now closed. Thank you for your comments.

Comments

Page 1 of 4

  • Comment number 1.

    could any person out there tell where this money is coming from. ie from the EU as a whole or just the eurozone countries.

  • Comment number 2.

    I think it will work like they say theyl defend the euro whatever it costs in lives jobs and living standards. some things being too big too fail means otherrs have to pay

  • Comment number 3.

    I was in favor of the Euro - but I can now see it is flawed - if Greece and other country's in the EU can not look after their finances correctly then under the single currency the rest of the EU MUST step in to help.

  • Comment number 4.

    1135. At 00:05am on 10 May 2010, Mike Stone Sr wrote:
    The Greeks are indicative of the economic results that come about through the institution of this so-called "one world economy", you cannot morph every country on earth into an equal sameness! The Greeks hid a lot of their debt in order to join the EU and these people are not equipped to successfully operate on the same level as powerhouse Germany! The EU is intended to compete with the world economic and political power of the US,however, several EU members lack the uniformity and discipline needed to make such a union a success! The US has put itself in terrible
    position by continuing to borrow money to give away through the IMF and US citizens must demand that our gov't stop throwing money away to foreigners and especially to nations like Greece that is pure socialists and are rioting to maintain unrealistic levels of "entitlements"!
    ********************

    I.
    On the issue of ´globalisation´ you are absolutely right, this is what capitalism is about; expanding markets and taking over total control. Only the problem there was that nobody controlled them [politicians, financiers and big businesses] indoctrinating at the same time structural system of Greediness. Therefore this recession was Only matter of time.
    What German, as disciplined nation unlike you Brits and the Americans, however, and particularly Markel, does is that right now she pushes hard for the needed financial general structural reforms in order capitalism start function in the wake of the 21st century …which actually began Papandreou himself seriously arguing with Markel, Sarkozy, the EU top bodies and Obama before agreeing on taking any loan - as if you did follow the development of all this would’ve noticed at the beginning he rejected any “bail outs, help packages, loans and whatever.”
    When the recession began it was the Germans and the French who immediately alarmed regulative measures and mechanisms should be implemented within the financial sector, and the Germans strongly criticised the UK for irresponsible over-borrowing and spending.

    II.
    “The US has put itself in terrible position by continuing to borrow money to give away through the IMF and US citizens must demand that our gov't stop throwing money away to foreigners and especially to nations like Greece that is pure socialists and are rioting to maintain unrealistic levels of "entitlements"!”

    Get real please. The US has the largest borrowings of all. Presently China, and does countries who does not have the practice to borrow but lend such as Russia and some Arab states, have the largest chunk of contribution to the IMF. But the US and the UK maintain the module of “borrow and lend …roll the money quick and play on the stock markets NY & London …buy now pay later crediting culture, etc.”

    You also refer to Greece as “socialist country” but the real problem is that Greece in the past and presently got absolutely nothing to do with infrastructure of socialist apparatus.
    I DO NOT remember any of the former USSR socialist countries defaulted simply because they never borrowed, over-spent or indulged themselves in luxuries. BUT I DO remember recently plenty of the former socialist USSR block having been involved with the western capitalism tragically DID defaulted, in fact they were the first who were hit, albeit throughout the process of perestroika they lived under austerity measures for the past twenty years.
    Under the Soviet socialism Mike tax evasions throughout the state, banking and crediting financial manipulations was something unheard of. Oh YES, All to your surprise there were black jobs such as into the building construction sectors (especially in the summers) and the communist leaders pretended they didn’t see thus they knew well people were very low paid and way overtaxed. But this was also the system of the southerners all around the Mediterranean; the politicians knew well people are not stupid to see what they are doing, evading taxes, misappropriating huge sums under one form or another, financial speculations and at the same time displaying their wealth acquired in no time …so therefore at certain point they [the governments] had to close their eyes too. And this is why we see now the protests and the rioting …BUT, still, in the case, the people are the last to blame and make them pay for the huge sums these above misappropriated in the past and/or the entire chaos the capitalist system has created.

    But black jobs and tax evasions this to be observed everywhere in Europe and America and NOT Only the into southern European countries. When Obama came into office began pressing the Swiss bank unlock its rules in order check the bank accounts of 64 000 Americans, and bare in mind there are plenty other banks around the world who are presently much stronger players than the Swiss should it come to black money, etc.
    But what really happened in the last years with the capitalism is they gradually combined the structure of the communist countries with the capitalism, i.e. via the state executing total control taxing as much as possible the ordinary and at the same time the privileged group scoring enormous profits putting it into their banks and displaying their wealth before the eyes of the people systematically fooling them with the twisted cliché of “success” perception. So the corruption starts from above.

    I will give you example. Some time ago the U.S. approving 7 bill package for Pakistan H Clinton spoke there expressing her dissatisfaction of the Pakistani state not being able to collect enough taxes “…we in America tax everything that moves” …while the very foundation of the U.S. constitution is to be a tax free country, but obviously done with the purpose fool and attract people from all over the world resettle there.

    III.
    The rioting we see now in Greece is something very positive in order realistic changes occur, is what the democracy about …people express their will and the government is to listen to them. BUT DOES IT rally happen?

    Take the other example: when the unlawful invasion of Iraq unfolded is going to happen although the unanimous UN vote against it the people of western Europe [and all around the globe of course, but I focus on us the Europeans to make a particular point] went out on the streets protesting by the millions, but for our own problems with our own governments we seems to be disorganised and weak. Now why is that and doesn’t it says something about our “democracy & freedoms”?
    Up to what level the democracy has decrease into our society “YES you have the right of organised demonstrations, strikes and protests …who listens to you people - we got the money, we got the power, the police, the military and the courts.”

    BUT into your last paragraph the point is made very clear; the EU “union” WILL NEVER function as such for as long as there is NO solidarity and uniformity between its members people’s and NOT ONLY as the repeatedly stated “solidarity” between the 27 ministers with their respective governments. The only hope for the union to eventually start function as such is within the working unions uniting together.
    How can you blame the Greek people demonstrating for improvements of their basic needs while you live a country where the average wage is at least 50% higher and etc added supplements, and with what right other than “YES we want them to be low paid and with low standards so we can have our cheap holidays on the Balkans?
    Read the EU´s social Charter …the workers have the right insist and demonstrate for obtaining maximum benefits improving their living conditions and standards.

    “Solidarity” for what; which country we are going to attack as we did with Yugoslavia and Serbia …who is next Russia …or the very inner club of EU/US decide which weaker economy within the EU we are going to attack and bankrupt them but we to survive?
    At its present stage the capitalism has become self-destructive scorpion entity and if quick general reforms not in place many countries are to follow Greece until the entire capitalist structure collapses.

  • Comment number 5.

    Don't see why it shouldn't work.

    However what ALL politicians need to remember is the covenant under which taxes are paid - to provide services to the citizens who employ them NOT to pay off loans.

    No services, no taxes. Geddit?

  • Comment number 6.

    I don't know who has all this money, maybe there wasn't a recession.

  • Comment number 7.

    acidorphan: 250 bn will be from the IMF, and where that money comes from is anyone's guess, but it is certainly not from the pockets of the multibillionaires and multimillionaires whose sheer greed brought about the mess... 60 bn will be lent by the EU Commission. Germany will be guaranteeing a massive 123 bn euros (that will make the Germans happy---). And the rest is from EU countries, but not those affected, of course...

    Personally, I feel the best thing would have been for Greece and then Spain and perhaps Portugal to get out of the Euro and devalue their new-old currencies. This would mean higher prices for foreign goods and services, but at the same time greater competitiveness for domestic goods.

    In Spain, gangs have formed and I guess going for robbery big style. This is not reported much, but I have friends from there who are telling me this.... So much for the invisible hand of the market.

    I may well move to Switzerland. It ain't the perfect place, but the Swiss are doing something right, their economy seems solid.

  • Comment number 8.

    I'm trying to get this straight in my head. Stockmarkets all over the globe are in freefall, the EU calls a meeting and decides how they can lend EU countries, already crippled by debt, more money (read debt), and suddenly the sun is shining again, all the arrows are green and pointing up. How many times can they shuffle the deck chairs on the Titanic? This postponement of the inevitable will acheive two things. 1. These countries on the edge of the abyss won't fall just yet. 2. They will fall later. And the fall will harm Europe in an immeasurably greater way.

  • Comment number 9.

    This rescue package is proof positive that the one-size-fits-all currency, not to mention the EU itself, does not work.

    Throwing money at it will not solve that underlying problem.

    The best thing we can do is get out!

  • Comment number 10.

    As soon as the word "contagion" got mentioned then the opportunity to make millions by betting on it happening was seized by those financial "wizz-kids" who bet on losers, thus guaranteeing that thy will lose. Remember "the domino theory" that took the US into Vietnam in the 50s and 60s? No: I didn't think you did. . .

  • Comment number 11.

    #3 Wrong Dave!

    It is not for the rest of the EU to step in. It is for the Eurozone countries to bale each other out.

    Do you seriously think Germany and the others will come to our aid if Sterling collapses? Get real!

  • Comment number 12.

    I would expect the stability package to work, the political committment to the euro is too strong, the worldwide economic consequences too dire. I would also expect the long term result of this will be a much tighter harmonisation of fiscal policy for countries in the eurozone.
    The UK Europhobes will whine about the European Super State etc, but the economic logic is there, if you are a member of a club, you abide by the rules.

  • Comment number 13.

    Then older I get the cynical I become - and seemingly with good reason.

    Seeing the writing writ large on the wall that the voters had lost patience with NuLabour's fiscal incompetance, its lies on on the Lisbon Treaty referendum, its open door immigration policy, its xpenses scandal ridden MP's, its multicultural and ethnic diversity stab in the back of the long traditions of Britain, Brown and Darling agreed to binding commitments to bail out other equally incompetant EU governments who cannot collect their own tax refenues, and who cannot control the self-aggrandising work benefits of their civil servants.

    This bailout is going to cost the next UK government £43 billion. How typical of NuLabour to leave a poisoned chalice knowing they would get trounced at the General Election - to raise that money will require a tax increase of £800 for every man, woman and child in the UK, what a legacy - knowing the gullibility of NuLabour voters, no doubt some will still support them in the next general election in October this year.

    Will the EU stability package work? Rearrange the following for the answer - "snowball's hell chance a in"

  • Comment number 14.

    1. At 10:08am on 10 May 2010, acidorphan wrote:
    "could any person out there tell where this money is coming from. ie from the EU as a whole or just the eurozone countries."

    This is a bank guarantee only. A letter, issued by a private bank consortium, including the IMF. You may guess who are the owners of those banks...

  • Comment number 15.

    “Will the EU stability package work?
    EU finance ministers have agreed on emergency measures worth 500bn euros (£430bn) to prevent the Greek debt crisis from spreading. Will these measures stop the crisis from affecting other countries?”



    That is exactly the essential question: All the banks in today’s world are interconnected but the U.S. and E.U. the most and therefore dependent on each other. If general quick reforms not implemented while they are investigating “the golden boys” from the Wall Street other countries with weaker economies will be forced to take more loans on high interest rate repayment and will go bankrupt, therefore ´the domino effect´ becomes inevitable. Take more loans and become more indebted …now that is the real point of the so-called “globalisation” and that is how we are going to make you “solider and loyal to US” indebted for eternity ;)

    This battle behind the scenes is nothing new …the Chinese were warning the west long ago “…reform your financial system.” And look at them right now, even as developing country have 13% GDP steady growth pulling the world out of the recession created by “the capitalist leaders of the world” while the capitalist growth completely frozen.
    I guess the Chinese right now are having their fun watching at US “Thank You capitalist fellas for helping the world become socialist/communist uuuniiifooormiiityyy." Loool

  • Comment number 16.

    dave wrote. I was in favor of the Euro - but I can now see it is flawed - if Greece and other country's in the EU can not look after their finances correctly then under the single currency the rest of the EU MUST step in to help.
    --------------------------------------------------
    I hope you mean the rest of the eurozone countries should step in and help, No money from the UK should be put into a fund to bail out the euro.
    also how can the eurozone find this money for a bail out when at least one of them cant pay its debt now and four others are really struggling.
    And who would trust any finacial dealings from a organization that has not had its accounts signed off for more than a decade becouse of suspected fraud

  • Comment number 17.

    The insistence that ECB purchases should be matched by sales so that no new money is created is foolish. The recovery is being slowed and may be stalled because of the continuing credit famine. this is the result of the shortage of money to back loans by institutions, made more cautious by the trauma of the credit crunch. New money delivered directly into the hands of those who would use it, would be welcome.

    The world's most important central banks have signalled their willingness to act against speculation in the currency markets, so there is no risk of a run on the euro. Those who have lots of euros, naturally do not want to see their wealth diluted, but governments should pay more attention to the needs of the rest of us.

  • Comment number 18.

    #16 acidorphan said "And who would trust any finacial dealings from a organization that has not had its accounts signed off for more than a decade becouse of suspected fraud"

    Absolutely spot on. If the EU were a limited company the directors would all be in jail.

  • Comment number 19.

    The package was devised as a means to calm market fears. Is it working? Check BBC Business..

  • Comment number 20.

    This only goes to prove the Euro is unstable, and effects countries in ways which would not happen had they retained their traditional and historic currencies.
    If a country has its own currency, and it finds itself in trouble against other currencies and world markets, it can devalue, which has happened in the past with many countries, including the UK.
    But, being in a common currency, this cannot be done, and therefore Greece, (and possibly Spain and Portugal) find themselves in this situation. Their hands are tied by Brussels. This is another reason why the UK must NOT join the Eurozone.

  • Comment number 21.

    Bold words from Darling - saying he wont help out....

    Thats until he realises half the councils moved there Ice save payback to Euro bonds!!!

  • Comment number 22.

    Look to see what effort Spain, Portugal and Italy really make to reduce their public borrowing deficit. If serious and genuine, Europe and the Euro may survive, if not we'll back to the current crisis and worse in a matter of months.

  • Comment number 23.

    Don't believe everything you read in the papers, especially the tabloids.
    The money for the eurozone comes from countries using the euro, none of it comes from the UK. The IMF of which the UK is a member has also promised support, the UK's exposure in the event of a 100% default is £8 billion.

  • Comment number 24.

    I'm no fan of the EU however it would be terrible for the euro to fail. However, supporting countries that should never have been let in to the eurozone is not the answer. I'm afraid that those countries that cannot support themselves should be left to it and should revert to their own original currencies. There is surely only room in the eurozone for strong countries or else the whole zone is weakened.

  • Comment number 25.

    With the mess that we are currently in let's hope so. As for the Eura ! I will not start that debate, but only say that i am against it.
    If these idiots at the top don't sort things out fast the who economy could be at risk here so come on guys. Reading the stats Lib/Lab are more compatable. Having said that Chelmsford is Lib/Con so whatever the outcome there are bound to be pointless arguments on all sides. Just sort ot out and lets get on with life.

  • Comment number 26.

    The IMF is no charity. Subscribing member countries are given loans at difficult times. America alone contributes a third of the quota and can get huge loans from the IMF. Big contributors get big loans; that is not subject to our opinion, we have no say in such matters.

    We can grumble when small players are given big loans, as for instance Greece is a small contributor via EU. Greece is not a member of the G8 on it's own but is a member of the EU, which is a member of the G8. EU is a huge player, contributiing more than Japan, Canada and Rusia.

    However Greece has immense monetary problems. Do we want their economy to phaseout, if so we could loose their contribution in the world market. It will pay us dividends in the long-haul, if we spend more to stimulate their economy, and not let it die off. In one of the G8 meetings, members pledged to help sustain other economies even those outside the G8.

  • Comment number 27.

    It will work if certain countries realise it might be worse to use the standby funds than put their respective houses in order? Conditions necessarily had to be very tough.

  • Comment number 28.

    For most Eurozone countries the worst is yet to come. Governments such as France, Germany & Italy are yet to announce the sacrifices that they will expect their citizens to make to shore up this deal. There will need to be dramatic cut backs in social security and government spending in the major Eurozone countries. I believe that this will lead to considerable civil unrest when countries such as France cannot bail out their farmers, fisherman, transport companies, etc, as has become their habit. Yesterday the French minister of agriculture hinted that bailouts have finished and you can expect many more such statements from government ministers in the following days.
    So the real danger for the Eurozone is not the markets, but public opinion. Countries such as France have lived beyond their means for many years and their populations have become used to a ‘hand out’ economy where each period of social unrest has resulted in extra government spending and hence debt. Slowly but surely, France will bow to the strict demands of Germany about fiscal policy. For the moment its government is in agreement, but has it got the nerve to make the drastic cuts necessary, I doubt it.

  • Comment number 29.

    >>"we shall defend the euro whatever it takes"
    In other words, we shall pour vast sums of good money after bad in the vain hope that this will somehow sustain the unsustainable. I believe that this will be like the UKs exit from the ERM only much, much bigger; it will probably take longer to play out. Thank God that we are not in the Euro, although I bet they will stitch us up for a share of the cost anyway if they can.

  • Comment number 30.

    What do you expect from Socialist countries, which would include the UK had Brown had his way.
    When you have a socialist country, where the state controls everything under public service, the private sector suffers, until you find yourself in a situation, where there is so much money being spent on the public sector, that the revenues from the private sector can no longer sustain it. You then have a major imbalance where the incoming revenue is lower than the outgoing.
    Simple, basic income/outgoing book-keeping.

  • Comment number 31.

    Will the EU stability package work?
    Yes, but...
    Should there be any unforeseen speculation, manipulation or other default schemes, you can bet the EU will be quick off the mark to counter attack.
    Why will this plan work in particular: Economic Affairs Commissioner Olli Rehn has said it: "We shall defend the euro whatever it takes".
    In addition, the one thing that the EU has that the rest of the world does not have is pragmatic, financial wizards. These guys know what they are doing, and can see long-term consequences. This wizardry alone can untangle the tangled web that washed ashore in Europe from the west.

  • Comment number 32.

    20. At 11:22am on 10 May 2010, brian wooster wrote:
    "This only goes to prove the Euro is unstable, and effects countries in ways which would not happen had they retained their traditional and historic currencies...This is another reason why the UK must NOT join the Eurozone."

    Right Brian, but your situation is much more serious than of Greece's, or of the EU's in average. Have a look at the figures per capita perhaps and start to pray...

  • Comment number 33.

    The problem with obsessions...

    The Internet has produced a culture of hollering all the time, and anyone with some obsessive idea seems to rejoice in the forum.... Like those now trying to shovel the current heap of financial problems into the wheelbarrow of "Socialists". It doesn't work that way.... The whole financial meltdown of the past years has been a failure of the so-called free market, meaning unregulated, which is a better term (unregulated is not necessarily free). Very un-socialist individuals and financial institutions have been tapping into the general greed to extract money from the markets by some bizarre means. it has nothing to do with double-entry bookkeeping and everything to do with making more money than is available. As a result, governments feel they have to step in, so that Joe Schmo, who also participated, doesn't get a pitchfork and march off to Bonn, Paris, Athens or wherever to poke the people who aided and abetted the system (and profited from it) in the gluteus maximus...

    I am against the bailout not for any political reason, by the way, but rather because it is using money that does not exist. Mathematicians can fiddle with imaginary numbers, financial folk should stick to real numbers...

  • Comment number 34.

    It´s simple. The powerful people -those who run big companies, government and financial monsters- become rich in both ups and downs of economy (some big companies might crack, of course, but the upper class as a whole always wins). And, of course, someone pays the bill. The people. But is people, trough consume and manufacturing, who keep the economy runing, since speculation doesn´t create real wealth and keeping millions in a hidden bank account in a financial paradise is certainly not the same as factory production. Then the question is, how much longer will it take before governments finally decide to regulate banks and financial operations, rather than surrender to them and try to comply with their expectations??

  • Comment number 35.

    Without serious commom budgeting rules and a more interventionist co-ordination of the 16 economies and some extended to the 27 members, this package is short lived.

  • Comment number 36.

    Will the EU stability package work? The markets sure hope so.

  • Comment number 37.

    I have explained the relationship between the IMF , EU and Eurozone countries in my last post for one to figure out the answer to you question. You did not publish it. Would you rather have it in this format thus:

    Q. should large loans be used to support eurozonne countries in debt?

    A. Yes.

    Q. Are you in Greece?.

    A. No.

    Q. Do you welcome EU intervention?.

    A. Yes.

    Q. What impact will the bail-out package have on people in Greece and economies in other eurozone countries?.

    A. It will stabilise and stimulate their economy, plus minimise the austerity and boost consumer spending. Eurozone countries including other markets in the world will gain from it, as economies are interdependent.

    PPPPPPPPPpppp please post my comment

  • Comment number 38.

    32
    Tibor
    I could not agree more, but did not want to go into too much detail.
    We are in a precarious and dangerous situation, and, if you look at expenditure per head of poulation, within the UK, you will also notice that there is a greater amount spent per head north of the border. Cannot think why this would be???!!!

  • Comment number 39.

    Question:


    What's going to happen if CDU/FDP coalition which suffered major losses in Sunday election and lost its majority in Bundesrat loses next national election in view of a major opposition of German electorate to any bail-out scheme for Greece?

    And if German demands for a return to D-Mark will force a government in Berlin to get out of euro club, who and how will finance subsequent bail-outs of Portugal, Spain, Ireland?

    Inquiring minds want to know.

  • Comment number 40.

    Not more pledges and promises made on our behalf. Time to get out and worry about ourselves.

  • Comment number 41.

    Lending more to Greece, Spain, Portugal, and Italy, is not going to improve their ability to pay the money back. You will not see, for instance, any rating agencies upgrading Greece because the Greeks now have a contingent line of credit. These measures are just buying time.

    Unfortunately, -- unless there is a major upturn in the world economy -- these problem are going to be getting worse over time rather than better. Greece is not planning to reduce its debt, rather only to reduce its budget deficit. It will continue to pile up debt.

    Greece's ability to service the debt will depend on its nominal GDP growth, whose outlook is rather bleak. In real terms the economy is likely to contract due to the tightening of fiscal policy. And there is currently no mechanism for inflating the Greek GDP through monetization or devaluation.

    Hence, Greece is likely to need real rather than financial help in order to survive this situation without default. It's not realistic to think that other Europeans will want to provide real help involving higher taxes and a transfer of their wealth to the corrupt Greek government.

    So, this loan package will not work. Even its impressive size is small in relation to the elevated debt levels in southern Europe. In the end it's a mistake.

    The EU needs to find a way to allow Greece and possibly some other countries to make a graceful exit from the euro. Perhaps the time to plan that is what they are buying with this package.

  • Comment number 42.

    It has been such a roller-coaster ride for the Eurozone that any answer to this one question is premature.The figures put forth are so impressive that if financial markets don't take notice then it is pretty much anybody's guess whatever will.
    Hardly a day goes by that does not derail the previous day's seemingly brave attempts by EU politicians to contain the spread of the rot.
    I would hope to see the Eurozone finally stabilise and the EU engage in a multi-pronged attack aimed at propping up growth and growth prospects across Europe.This is truly the underlying structural weakness plaguing European economies.
    It is obvious to the naked eye even to observers who are least keen on such matters. It got disguised over years of excessive consumption-led growth imploded by the financial meltdown and deep recession that followed.

    Going forward economic growth on a changed model from the recent past is the biggest challenge of all.
    Unless growth is restored to meaningful levels sustaining itself in the future, it is hard to see how the more heavily indebted economies will cope.
    This is what credit rating agencies suddenly discovered following years of merrily conniving with many a government's borrowing binges in pursuit of questionable development and pay policies.

    I certainly expect the latest moves to plug the problem allowing countries, especially the ones hit hardest, to cling to the lifeline now thrown.
    Hopefully the extra time will be used to efficiently rein in public finances as well as kickstarting the economy to take it up to sounder footing.

    If both objectives should fail then some EU members - within and without Eurozone - are condemned to irreversible economic decline and social fraying.

  • Comment number 43.

    The UK commitment from Alistair Darling is £8 billion.

    How many services will suffer because they need this money? We can only be lending already borrowed money, or has the government got money we don't know about?

    Is the Euro monetry system a seperate item from the EU or not, we have not joined because of this type of reason but we still pay.

    We already prop up many countries where they take and we pay, now we are £180 billion in debt we should taking from the pot.

  • Comment number 44.

    I'm hoping that it fails, just for the lulz. It's going to be hilarious if the Spanish and Irish economies get sucked down the toilet along with Greece.

    This isn't based on any rational analysis- I just look forward to all the shouting and recriminations. Plus, it's making Germans poorer, which is an unexpected, but nonetheless amusing side effect.

    I honestly can't see Greece, Spain, Ireland and Portugal all getting their act together, especially now that they know there is free money on the table.

  • Comment number 45.

    The EU 'post package' stabilty is as illusionary as the package it's self.The real test of the package will be if and when Greece does'nt receover .

  • Comment number 46.

    To all those claiming the Euro's day has come - tell me, how come the markets have reacted so positively or do these guys know something the market professionals don't?
    "The euro strengthened in early trading, surging above $1.30, after hitting a 14-month low against the dollar last week."
    "At midday in London, the FTSE 100 share index was trading up 255.5 points at 5,314.
    "This followed a rise in Asian stock markets, with the Japan's Nikkei 225 index up 1.3% and Hong Kong's Hang Seng index climbing 0.8%."
    How come???

  • Comment number 47.

    Work at what?

    Events now are identical to those of 1345AD. In 2007, the world had a choice between a short painful recession or long term depression. It chose depression tomorrow. Now that depression s upon us it has a choice of depression today or starvation, war and mass slaughter tomorrow. It is choosing the second option.

    The world is in a rate-trap. INterest rates need to fall to stop depression and need to rise to to protect a flight of capital, mainly down the drain.

    With the background of bailouts, this is vital to save Greece, but in the long term will cripple and sink any recovery in Europe and worsen a long term crash for it will allow people to believe that the brutal economic surgery can be put off and to think that they can ignore "Tory cuts" and just elect a socialist Government to keep sepnding liek Brown until the cash runs out.

  • Comment number 48.

    The world financial system is basically a house of paper and this stability package is basically underpining the paper house with yet more paper.

    Paper as we all know is very combustable, it only takes a small spark for it to ignite and turn to ash.

    I am sure that further sparks will continue to be serious threat to the continued existance of the paper house, there are also plenty of financial pyromaniacs out there to create more sparks.

  • Comment number 49.

    46. At 1:26pm on 10 May 2010, Cosmologic wrote:
    To all those claiming the Euro's day has come - tell me, how come the markets have reacted so positively or do these guys know something the market professionals don't?

    The markets reacting positively today does not signify that all is well as far as the Euro's future is concerned. Do you know something the market professionals don't?!

  • Comment number 50.

    With typical EU fairness wait until one of the non-Euro currency has a blip, it will be a Gallic shrug, and be off with you, no bail out for you, it is your own fault, don’t come crying to us! Your not Euro(pean) enough!

  • Comment number 51.

    “Old boys club” or what? Be as profligate as you want we’ll just use the cash from Britain and others with the sense not to join this bureaucratically made up currency!

    There are 25 members in the EU, only 16 joined this leap into the dark adventure of launching a new currency for no valid reason. The sole reason was to make the federation of Europe one step closer. If trade had legitimately been the reason, as given by the Eurocrats, then they could have set fixed exchange rates. It worked for decade under the Gold Standard. Well till Labour messed it up!

    Only 16 joined but only 12 had economies that met the standard, so lie, fraud and fudge and presto you have a bigger club! More clout, more importance and more importantly a bigger budget, more staff, so higher pay for the boss! EU integrity is greatly sought! Rarely found!

  • Comment number 52.

    What a load of pompous, nationalistic rubbish is being spouted on here. Firstly, the reason for this huge aid fund is quite simply to stop speculation against the Eurozone, most of which is coming from wealthy Americans via their banks. The idea is to send a message to these people that we, the Europeans, are prepared to fight back. Secondly, if all goes well this money will not be needed at all. It is not sitting in a bank account waiting to be used. It will be called in if and when it is needed. Meanwhile some of the countries that were "going bust" have started to turn their economies around. Ireland, Spain and Portugal will make big efforts to do so and may head off the need to be bailed out. Greece has some very special problems and the Greek government have not sold the idea of austerity measures very well to their people, hence the rioting. Also they are not doing enough to stop the rich avoiding taxes, and this does not sit well with the poorer people who are going to suffer for a good few years. The Greek government falsified the figures to get into the Euro but this was condoned by the other members and blind eyes were turned because it was a political move, not an economic one. A common currency is an important step on the way to common control and a "United States of Europe" which some powerful people in the EU want. Now we have to support Greece or admit that it was a fix and they should not have been allowed into the Eurozone on the basis of their figures. Hopefully in the longer term it will all come right, but meantime we all have to suffer and pay. The UK is well off out of it.

  • Comment number 53.

    The Euro and the EU is a house of cards....
    Wait till the hurricane arrives...

  • Comment number 54.

    I can't understand why the UK had to pledge anything.

    If some Eurozone country is about to go belly-up, they get a loan from this fund.

    If the UK is about to go belly up - does the UK get a bail-out/loan? I have yet to see the detail but I bet not.

    Another questionable decision by our now defunct Labour party. We offer money to prop up countries like Greece and the other PIGS but we get nothing in return. The Eurozone won't prop up sterling.

  • Comment number 55.

    34. At 12:44pm on 10 May 2010, Federico wrote:
    "...the question is, how much longer will it take before governments finally decide to regulate banks and financial operations, rather than surrender to them and try to comply with their expectations??"

    Realistically banks control all of those governments deeply in dept don't you think so? As dept is the mean of control, every company, institution and person MUST sit in dept up to their neck at least.
    The banks are the churches for politicians...

  • Comment number 56.

    EU is a father and Greece is his naughty son who sometimes do wrong thing.. and at the end, the father forgave the son..but the father'S hand will often be on his son's ear...and he will limit his son movements every time.. and than the son will get the willies,and leave his home spontaneously...will the father feel upset?

  • Comment number 57.

    4. At 10:27am on 10 May 2010, Rasputin wrote:
    15. At 10:50am on 10 May 2010, Rasputin wrote:,
    dear rUsputin where are you?:) and ı took these commets to bring it to my teacher in university.. ı wonder what is your job? thanks have nice dayyyy...

  • Comment number 58.

    PROVES WHAT PROGRESS AND DEPTH OF WORLD'S ECONOMIC RECOVERY HAS LEARNED / TAKEN PLACE IN 1 1/2 - 2 1/2 YRS. WORKOUT... 1/3 OUT ..WATCH CALPER'S PENION FUND AND MILAN 4OO MAYORS-GOVT BONDS. "SOMEONE" ONCE SAID IT'S ALMOST FUNNY WHAT'S HAPPENING, EXCEPT IT'S MONEY. BK'ED AND HEDGED ICELAND NEEDS "JOE VOLCANO" BANKER TO STOP THE BLEEDING {ECONOMICALLY AND DAMAGE TO NATURAL RESOURCES}... SIGNED BY ...SPARTACUS {SURE FEELS LIKE ROME}

  • Comment number 59.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 60.

    Whether it works or not £8 billions of tax payers money we have to borrow money to shore up a Country, a Government and a currency that is none of our business. This money is given/lent by our own defunct people in New Labour that are imminently leaving office. What kind of people are these New Labour?

  • Comment number 61.

    Of course it won't work. Anyone even remotely involved in business will tell you not to invest in a failed concern. The Greeks have to face severe austerity measures whether they like it or not, and without any external help, otherwise any recovery will be false, temporary, and lead to an even worse situation, dragging other countries down with them.

  • Comment number 62.

    IMF money for mediterranean countries allows a redevelopment of relevant companies on international trade. Portugal, Spain, Italy, Albania, and Greece could emerge with overseas deals. The tech industry takes a serious interest in agreements on corporate tax and short term loans. The region will end reliance on social welfare and establish significant business revenues.

  • Comment number 63.

    It's now apparent that several nations were pressed into the Eurozone to by politicians to raise its profile, to make it seem good and right, no matter whether they met the criteria or not.

    Presumably the Brussels lot realised (or they shouldn't be in any position to be involved). So, shame on them because now the rot is showing through the veneer; Germany is under sweat trying to persuade its taxpayers that they should hand their hard-earned money to corrupt, hedonistic countries like Greece, and underwrite the debts of many others. Disgusting.

    The very least that should hang over offending nations is that they'll be expelled from the Eurozone if they don't shape up. After all, they can revert to their native currencies, carry on with trade and commerce - and France and Germany will be relieved of a huge burden.

    I don't think this rescue package will be anywhere near enough. Were I German I'd be having the heebie-jeebies right now. It certainly doesn't act as a deterrent to profligate spending but it has appeased the markets for today at least.

    Perhaps it's time the Euro was scrapped among the southern nations. It obviously isn't working well. How one can have a common currency with multiple monetary policies, national politics and not even a common language? An altruistic dream but in practice, daft.


  • Comment number 64.

    It's now apparent that several nations were pressed into the Eurozone regardless of their finances to raise its profile, to make it seem good and right, no matter whether they met the criteria or not.

    Presumably the Brussels lot realised (or they shouldn't be in any position to be involved). So, shame on them because now the rot is showing through the veneer; Germany is under sweat trying to persuade its taxpayers that they should hand their hard-earned money to corrupt, hedonistic countries like Greece, and underwrite the debts of many others. Disgusting.

    The very least that should hang over offending nations is that they'll be expelled from the Eurozone if they don't shape up. After all, they can revert to their native currencies, carry on with trade and commerce - and France and Germany will be relieved of a huge burden.

    I don't think this rescue package will be anywhere near enough. Were I German I'd be having the heebie-jeebies right now. It certainly doesn't act as a deterrent to profligate spending but it has appeased the markets for today at least.

    Perhaps it's time the Euro was scrapped among the southern nations. It obviously isn't working well. How one can have a common currency with multiple monetary policies, national politics and not even a common language? An altruistic dream but in practice, daft.


  • Comment number 65.

    47. At 1:30pm on 10 May 2010, RObert L Thompsett wrote:
    The world is in a rate-trap.

    Where is Bob Geldof when you need him ?

  • Comment number 66.

    Here we are, up to our necks in debt and the government is giving money (our money?) to another country to help settle their debt! I wonder how much Iceland is contributing?

  • Comment number 67.

    Well lets analysis this in simple terms shall we?

    Existing - previous bailouts $1 trillion, $2 trillion??? Shiny new bailout plan $1 trillion-ish!

    Will it 'work' - depends who you ask! Will it work for the bankers and finance wizards? Yes Will it work for the ordinary citizens of Europe? NO


    Revolution sounds like the best idea to me! What do you think?

  • Comment number 68.

    you can`t teach an old dog new tricks

  • Comment number 69.

    Again, if outraged Germans force the new government (Merkel's CDU/FDP coalition has just lost its majority in Bundesrat) to abandon euro, and return to their beloved D-Mark who's going to pay for successive bail-outs of Portugal, Spain, Ireland? Etc.?

  • Comment number 70.

    It isn't going to work.

    The UK should leave the "EU" now.

    If your country is in the "EU" try to get it to leave.

    If it will not leave then try to get yourself and/or any money you have out as soon as possible.

  • Comment number 71.

    Let’s see what happens on Greece testground first. One thing for sure – money printing presses have never helped anyone. It’s actually not about helping economies – it’s about keeping financial tycoons afloat. Congratulations to China living to Lenin’s testament – “Capitalists will sell us the rope we will hang them with and we will pay for it by the loan they will give us”.

    If Euro needs to be saved – can anyone advise what exactly needs to be saved and protected?

  • Comment number 72.

    Unlikely since neither the Greeks, Portuguese or Spanish will take action to stop labour inflexibility or stop the payment of any pension to people below 55 unless on medical grounds that then have to be independently validated.

    Equally, these countries will not enforce tax collection regimes or civil recovery of people who claim to earn nothing but live in expensive houses. Alternative is to tax houses penaly until they agree to pay taxes properly at a high level.

  • Comment number 73.

    Several hundred billion to save the economy of a country which has only itself to blame for it's economic woes? How pathetic!

    What about helping countries which do not have economies to begin with? Who will provide bailouts for them? Several hundred billion in euros could help many countries around the world where people are dying on a daily basis from starvation, disease and many other causes. It's not like Greece is suddenly going to become a country like Somalia if they don't receive this bailout.

    The twenty-first century was supposed to be the century where the world was supposed to become a better place, but all I see is the widening gap between rich and poor countries getting wider at an exponential rate. Seems to me like developed countries, western/european countries, rich countries want the poor/developing countries to remain as they are.

  • Comment number 74.

    It'll work because the economy is not some voracious,uncontrollable animal.It is easily manipulated by those with the means to do so.If the decision has been made to save Greece and the EU,then all will be fine.If not,prepare for chaos.............

  • Comment number 75.

    I think Greece should have been forced to switch to the Drachma until they have managed to switch to a proper method of collecting taxes. Also they have to get rid of the excess of corruption and non existent 'workers'. They have I think 11 million people so the debt is huge in relation to population

  • Comment number 76.

    This is disastrous ! It's not as if Greece had been victim of some terrible natural disaster like floods, earthquake or fires. In that case, it would be logical for other EU members to help them out.
    No, Greece brought this upon itself through corruption, greed, wasting money, too highly paid civil servants, too early retirements - the list goes on endlessly. Greece and its people are entirely responsible for their current plight. They did not meet the criteria to Euro membership but fiddled the books at the time and the other countries either didn't see it or buried their heads in the sand. There is not one valid reason why we should pay for Greece's mismanagement. Financial discipline and order are essential. You cannot spend what you don't earn. If Greek culture is inevitably pointed in this direction, then Greece purely and simply needs to be excluded from the Euro zone and should go back to the drachma, but I, as a "Euro" taxpayer do not want to pay for their misdeeds.

  • Comment number 77.

    This will spread Greeces debt across all the contributing countries. Not a solution. This is buying time, and not very much of it either.

  • Comment number 78.

    Oi, Alistair Darling! Give me my £8,000,000,000 back!

  • Comment number 79.

    No amount of loans, guaruntees or emergency measures will help matters as long as each euro zone nation is free to ignore the requirements for fiscal stability that they agreed to when they joined. The euro club members have just agreed that instead of kicking out irresponsible members for breaking the rules that they will subsidize their poor decision making. It's a recipe for disaster and the only question is how much good money they will throw after bad before the system collapses and the shock waves send the world's finacial markets into another tumble.

  • Comment number 80.

    Where’s Hercules when you need him?

  • Comment number 81.

    The EU loan to stymie off the debt contagion within the euro zone countries is similar to conducting a skin-graph cosmetic surgery on a victim with acid burnt face. The loan is still skin coming off the tax payers who already been burnt beyond recognition to conceal the ugliness of their acid burnt face. One things is cosmetically salvaging the image of a once "assumed power bloc to be" temporally with this unrealistic economic maneuvers. The big problem ahead is living & dealing with the psychological and practical impediments that comes with a debt crisis such as the one the EU has found itself in now...One can only hope and wish for the best, but hoping against hope is never a wise man's take that the sun will ever rise in the west!

  • Comment number 82.

    The Greece deal is a terrible, terrible thing. The whole affair hit the eurozone hard but giving a blank cheque to the Greece govt, after they falsified reports about economic growth and national debt ... it's unthinkable. The measures announced are hardly enough and I don't see how or why the same political class that ran the Greek economy into the ground is allowed the first attempt at setting things right.

    Personally, I feel for the Greek people. The political class wrecked the country and now the people are paying the bill for that. Unfortunately, there's no way out but in the same manner, I don't see why the rest of Europe should pay along when it's obvious the country is incapable of being a teamplayer for Team Europe.

    On the same lines, I believe that my own country (alongside Bulgaria) shouldn't be allowed into the Eurozone. Romanian (as well as Greek, Hungarian and Bulgarian) politicians are incapable of doing the right thing, economically-speaking.

  • Comment number 83.

    71. At 3:31pm on 10 May 2010, Vlad17 wrote:
    "...If Euro needs to be saved – can anyone advise what exactly needs to be saved and protected?"

    All values nominated in Euro from speculations and sell out in panic as that may seed a Lavina, devaluation, than crash of the currency.


  • Comment number 84.

    A very sensible package which will ensure that Greece climbs out of this dire situation. You cannot shrug your shoulders and allow Greece to bleed!!

  • Comment number 85.

    There was me thinking that Gordon Brown was the financial saviour of the world. Failed miserably if you ask me. His supporters keep saying he is brilliant but he was part of the problem and as far as I can see he hasn't done what he so often boasts about - fixed it.

    My pound is certainly not safe in his pocket.

  • Comment number 86.

    All these bail outs...Doesn't anyone relaize the term "bail out" refers to bailing out a sinking ship. You can't keep bailing out indefinitely. Eventually you have to fix the leaks or you'll sink.

    All these bail outs remind me of junkies needing a fix. When are governments finally going to solve the problems by reducing spending while cutting taxes to stimulate real growth in employment and the economy?

  • Comment number 87.

    How much does it cost to start a Bank? If the EU used this capital to start a Inter-nation Bank giving loans to countries at a fixed cheap rate, then borrowing from private sources becomes unnecessary. Monetary creation becomes once again the privilege of elected Governments, not the means of speculation by Banks who are more interested in ripping us off.

  • Comment number 88.

    Did I read somewhere that UK Chancellor Darling has chipped in with another thirteen thousand million pounds (£13 billion in new money - it sounds so much less)? And we are not even in the Euro.
    When is this profligate Labour Government going to go?

  • Comment number 89.

    Why can't the EU 'common market' founders not dig up some of that nazi gold they've got hidden and hand it over to the Greeks, to help continue the european federalised state strategy / takeover that was decided upon back in 1944.
    (Google The Red House Report.)

    Should get a good price for it ATM.
    ( A lot better than 'Buster Brown' did for ours )

    It would be more meaningful than just a promise note.

  • Comment number 90.

    This is the equivalent of trying to put a sticking plaster over an errupting volcano. The more they delay the innevitable the worse it's going to be for everyone it's going to be one almighty mess!!!!!!!!!!!!!!!!!!

  • Comment number 91.

    I think that the best way to get out of this mess, is to have the Workers of the EU actually Work. Too many socialist entitlements.

  • Comment number 92.

    "
    86. At 5:01pm on 10 May 2010, MikeIL wrote:

    All these bail outs remind me of junkies needing a fix. When are governments finally going to solve the problems by reducing spending while cutting taxes to stimulate real growth in employment and the economy?
    "

    When the party which came first in the General Election, gets to govern.

  • Comment number 93.

    Is this bailout and others which apparently are yet to come simply pouring money into a black hole? Citizens of Greece apparently do not want to change their work habits and their evasion of paying taxes, so what will the outcome be? A continued subsidising of these situations by the the E.U.?

  • Comment number 94.

    Economic Affairs Commissioner Olli Rehn said the agreement proved "we shall defend the euro whatever it takes".

    Does this mean Brussels are willing to seize control of nations economies?.
    Does that mean i will have to pay other countries debts aswell as my own country debt?.
    Oh who exactly is this bloke?,did i elect him?,was he elected?.

    As usual the citizens of the EUSSR left in dark again.

  • Comment number 95.

    BBC conveniently forgets to mention that Alastair Darling has committed the UK taxpayer to underwriting a further 13 billion quid debt held by other European governments. Spotted however by the UKIP website, and the Telegraph.

  • Comment number 96.

    16 and 18 repeat the old smear about the EU accounts not being signed off. There's some truth in the story, but not as much as certain very right-wing vested interests would have us believe. For a fuller account see:
    http://ec.europa.eu/unitedkingdom/press/letters_to_the_editors/index_en.htm

  • Comment number 97.

    "stability package" now. Very nice.

    You guys are learning:)

  • Comment number 98.

    I did not vote for a labour party, I did not vote for the Lib Dems. I live in Kent which has turned completely blue and we do not have one MP in Kent for Labour or the Libs Dems so why could I land up with a goverment that I did not want or others in the south east.

    I think this is a total disgrace.

    are we going to have a goverment that is made up of labour, lib dems, National parties and idependents, basically everyone in the commons expect the party that got the most seats and the most votes.

    UK is dead....

  • Comment number 99.

    83. At 4:37pm on 10 May 2010, Tibor wrote:
    71. At 3:31pm on 10 May 2010, Vlad17 wrote:
    "...If Euro needs to be saved – can anyone advise what exactly needs to be saved and protected?"

    All values nominated in Euro from speculations and sell out in panic as that may seed a Lavina, devaluation, than crash of the currency.

    -----
    Am not an economist but as far as I understand [apart from speculation] currency may only crash if money mass starts to exceed its material equivalent. So Greece debt theoretically shouldn’t cause Euro crash unless there are strong anticipations that money printing machines are soon to be turned on, should it? I would admit that psychologically investors may start getting rid of Euro, but the only result will be that someone later will make a fortune when panic is over – if printing machines remain shut down. Sad to realize that capitalists became so powerful to play with whole countries and already continents, i.e. our lives on a high scale. All strings are in US anyway so far. The actual question is – for how long Pax Americana will last with China and Russia regaining power.

  • Comment number 100.

    Greece needs stability right now. European leaders along with President Obama must request of PM Papandreou and President Papoulia to pacify the protesters and to go after all illegal activities. Fakelakia or bribes to the authorities and government must stop in order for the country to operate properly. In addition all tax not paying people and business must pay up now. All illegal awarded pensions must be returned and their award revoked. This will save the country billions and it will normalize the everyday affairs of the country.

 

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