EU agrees on 750bn euro rescue deal

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EU finance ministers have announced a 750 billion euro ($960bn) emergency package to safeguard the euro and protect vulnerable European economies from falling into the same debt crisis as Greece.

After 11 hours of talks in the Belgian capital Brussels, finance ministers settled early on Monday on a package they hoped was big enough to prevent Greece's debt crisis from spreading, saying "the mechanism will stay in place as long as needed to safeguard financial stability".

Olli Rehn, the EU's monetary affairs commissioner, said the agreement "proves that we shall defend the euro whatever it takes".

Under the three-year aid plan, the EU Commission will make 60 billion available while countries from the 16-nation eurozone promise bilateral backing of 440 billion euro.

The IMF is to put in at least half of the EU's total contribution, or 250 billion euro, Elena Salgado, the Spanish finance minister, said.

"We are placing considerable sums in the interest of stability in Europe," she said.

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The safety net was meant to fend off what Anders Borg, the Swedish finance minister, called the "wolf pack" of financial markets from preying on countries with bloated budgets, such as Portugal, Spain and Ireland.

Asian stock markets rose on Monday following the EU announcement, with major benchmarks such as Japan's Nikkei and Hong Kong's Hang Seng leading the advance.

The euro currency, which last week sank to a 14-month low against the dollar, rose in early trade in Asia while prices of gold, considered a safe haven investment, fell after touching near record highs last week.

Ministers from Spain and Germany said eurozone countries would speed up their efforts to tackle their fiscal problems, with Spain and Portugal committing to "take significant additional consolidation measures in 2010 and 2011" and present them to the EU's finance ministers on May 18.

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The EU's slow response to the crisis and its failure to keep Greece from reaching the brink of bankruptcy triggered slides in the euro and global stocks last week, and intensified fears the crisis would spread.

Financial markets have been punishing heavily indebted eurozone members, threatening to plunge them into Greece's plight.

But some eurozone nations blamed the fragile governments and a lack of European co-operation for the crisis.

Josef Proell, the Austrian finance minister, said he was "against putting all the blame on speculation".

"Speculation is only successful against countries that have mismanaged their finances for years," he said.

Still, jitters over eurozone finances have set global markets on edge and created the conditions for a nearly 1,000-point drop in the Dow Jones industrial average on Thursday, the trigger for which remains a mystery.

Policymakers around the globe are worried the crisis in Greece could spread to other countries, fears compounded by the unexplained shock plunge in US stocks that shook up already nervous markets.

In a sign of the global concerns about the eurozone's crisis, Barack Obama, the US president, spoke by phone with Angela Merkel, the German chancellor, about the importance of EU members acting to build confidence in markets.

Shipping US dollars

And the US Federal Reserve, or central bank, on Sunday opened a programme to ship US dollars to Europe in a move to head off a broader financial crisis on the continent.

Other central banks, including the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank, are also involved in the effort.

The Bank of Japan would soon consider a similar programme, the Federal Reserve said, adding that the action was being taken in "response to the re-emergence of strains" in financial markets in Europe and to "prevent the spread of strains to other markets".