Monday, November 29, 1999

IMF approves 30 billion euro loan for Greece

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The International Monetary Fund on Sunday approved a 30 billion euro ($40 billion) rescue loan for debt-stricken Greece, as European finance ministers met to agree on ways to calm market concerns.In a brief statement after a nearly three-hour meeting, the IMF board said the loan program was for a three-year period. It is part of a European-led 110 billion euro financing plan for Greece to avert the euro zone's first sovereign debt default.Worries that Greece's problems could spread to other countries have made financial markets nervous and made trading extremely volatile. Analysts have identified Portugal, Spain and Ireland as countries that could follow in Greece's footsteps and be forced to seek help.The Greek bailout package is the biggest in history and comes with stringent conditions that include a combination of spending cuts and revenue increases.Greece has a debt burden of more than 115 percent of gross domestic product, and the EU-IMF package is intended to help Athens meet financing needs falling due on May 19.In Brussels on Sunday, European finance ministers pressed for special measures before financial markets open on Monday to stop Greece's debt crisis from spreading, promising to do everything they can to defend the euro from the "wolfpack" of financial markets.The European Commission will propose to ministers a mechanism intended to provide a multibillion-euro safety net for other euro zone countries.Meanwhile, the White House said President Barack Obama and German Chancellor Angela Merkel talked on Sunday about European financial markets and discussed the importance of European Union members taking steps to build confidence in markets.White House spokesman Bill Burton said the phone conversation was part of Obama's "ongoing engagement with European leaders with regard to the economic situation there."(Reporting by Lesley Wroughton, editing by Jackie Frank and Eric Beech)
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