Greece, on Friday secured the three year deal they need as an absolute minimum to stay afloat. They have â‚¬80 billion from the Eurozone and â‚¬30 billion from the IMF (which includes the UK).
But in a move designed to fend off the market wolf-pack circling the PIIGS countries, the concept was extended to provide a huge safety net package for other weak Eurozone countries. Depending on what you read the package is somewhere between â‚¬500 billion and â‚¬750 billion drawn from both EU and IMF funds. Olli Rehn, the EU Monetary Affairs Spokesman said of the agreement that it “proves that we shall defend the euro whatever it takes."
The deal was forged very quickly over the weekend in order to beat the deadline of the opening of the Asian markets when it was feared that a huge chunk would be taken out of the Euro if agreement wasn’t reached. In doing so the EU rulebook was torn up. Up until now most observers have accused the EU of being behind the power curve reacting too late as the crisis developed. This move over the weekend is hoped to be that giant leap that takes them well ahead of the markets.
What has been put in place is a monster rescue mechanism that will be used to prop up the Euro when countries get in to troubles.
A debt fire started in the Greek part of the EU forest. It now threatens to spread to neighbouring areas. But instead of creating a huge fire break the EU answer has been to chop down trees across the EU forest and deliver them to the Greek area in the hope that the fire will burn out and leave enough wood behind. They may find that the fire will keep burning until all the wood in the forest is gone.