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Posts Tagged ‘bailout’

Euro zone boosts powers of rescue fund to aid Greece, Ireland, Portugal

July 22, 2011 Comments off

theglobeandmail

Greek Prime Minister George Papandreou, left, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso speak after the EU summit Thursday in Brussels. - Greek Prime Minister George Papandreou, left, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso speak after the EU summit Thursday in Brussels. | AFP/Getty Images

Euro zone leaders agreed at an emergency summit on Thursday to give their financial rescue fund sweeping new powers to help Greece overcome its debt crisis and prevent market instability from spreading through the region.

French President Nicolas Sarkozy said leaders of the 17-nation currency area had agreed to ease lending terms to Greece, Ireland and Portugal, while private investors would voluntarily swap their Greek bonds for longer maturities at lower interest rates to help Athens.

US raised debt ceiling 102 times – economist

July 17, 2011 Comments off

rt.com

President Obama has warned the US is running out of time to deal with its financial troubles – the Congress must raise the current $14.3-trillion debt ceiling again. And as Professor Rodrigue Tremblay told RT, this has become a tradition in the US.

­The US repeatedly gets away with raising the debt ceiling, Rodrigue Tremblay told RT.

“This system that the US has, has been in place since 1917. They raise the debt ceiling each year, they have done it 102 times; eight times under George W. Bush alone. Most countries do not run their Read more…

Bailout plan roils Greece’s leaders

June 17, 2011 2 comments

boston

Greece was wracked by political turmoil yesterday as the embattled prime minister faced down a party revolt over new austerity measures — a bitter dispute that forced the EU to hint at new loans so Greece can fend off a summer default.

Prime Minister George Papandreou has struggled to garner support for a new package of $39.5 billion in spending cuts and tax hikes demanded by the European Union and the International Monetary Fund, which last year granted his debt-ridden nation $155 billion in bailout loans.

But the measures have sparked riots on the streets of Athens and open criticism from his own Socialist lawmakers. Papandreou’s desperate efforts to form a coalition government with the opposition conservatives collapsed Wednesday, and the Read more…

What You Need to Know About the International Monetary Fund

May 17, 2011 1 comment

wealthcycles

The International Monetary Fund is in the news again for scandals of a more personal and dubious type—the arrest of fund chief Dominique Strauss-Kahn over allegations of sexual assault. This comes at a time when the IMF can least afford to be embroiled in political scandals—the global recovery is tenable at best, and the combination of rising prices, declining credit, and falling faith in fiat currencies is becoming a cocktail for disaster. But this does give us a great opportunity to help people understand what the IMF does, who pays for it, and how it works.

What the Heck is it?

Most people in the world couldn’t describe what the IMF does; yet if your country is one of the 187 member countries, you have paid for it. ABC World News says this:

The Fund has deposits from member countries – commonly called “quotas” – totaling some $340 billion, with additional commitments for about $600 billion from member governments should the funds be needed.
Quota requirements are determined by the size of the member country’s economy. So the United States, with a $14 trillion GDP, is the biggest contributor with about 18 percent of the quotas.

And what do they do with all that fiat currency? To answer that, we need a little history lesson.

The IMF was founded after World War II during the beginning of the Bretton Woods system. In the Bretton Woods system, exchange rates were Read more…

EU Ministers OK $110.8 Billion Portugal Rescue

May 16, 2011 1 comment

European Union finance ministers cleared the way for Portugal to receive 78 billion euros ($110.8 billion) in aid, making it the third euro-area country to fall back on official loans.

The EU’s two bailout funds, the European Financial Stability Facility and European Financial Stabilization Mechanism, will each provide one-third of the assistance, while the International Monetary Fund will contribute the rest, the EU said in a statement after a unanimous vote in Brussels today.

Finance ministers called Portugal’s planned budget cuts “ambitious but credible,” according to the statement. The aid program will run for three years.

Portugal follows Greece and Ireland in requesting a bailout from the EU and International Monetary Fund. Politicians are struggling to convince investors that 256 billion euros in aid to the three countries will be enough to stamp out Europe’s debt crisis and prevent the euro region’s first restructuring.

Portuguese Finance Minister Fernando Teixeira dos Santos said before the meeting he was confident of approval because “all the issues that we had to clarify were clarified.” German Finance Minister Wolfgang Schaeuble had also been upbeat about Portugal’s aid request.

The meeting was clouded by the May 14 arrest of IMF Managing Director Dominique Strauss-Kahn on Read more…

Signals Spain may seek bailout spelling disaster for eurozone

May 16, 2011 Comments off

rt.com

Violent protests against austerity cuts have broken out in Spain, as the country struggles to deal with record-high unemployment signaling that Madrid could possibly be next in line for an EU bailout.

Across the border, Portugal’s crumbling economy is desperate for a €78 billion rescue package. Read more…

Pressure on Portugal After New Credit Downgrade

March 16, 2011 Comments off

nytimes.com

LISBON — Portugal’s borrowing costs pushed higher after Moody’s downgraded the country’s credit rating, stoking the pressure on the country’s beleaguered minority government.

The yield on Portugal’s ten-year bond rose 0.04 percentage point to 7.44 percent. The equivalent yields for Greece and Spain, two other euro countries struggling with high borrowing levels, were down modestly.

Moody’s Investors Services cut the country’s rating by two notches to A3 late Tuesday, saying the debt-stressed country is struggling to generate growth and faces a tough battle to restore the fiscal health needed to calm jittery financial markets.

Prime Minister Jose Socrates said late Tuesday he would quit if Parliament doesn’t consent to his government’s latest batch of contested austerity measures.

Portugal aims to raise up to €1 billion in a sale of Read more…