Correspondent's Choice

This story about a possible financial rescue for Greece was published by EurActiv on 12th April 2010.

Eurozone finance ministers approved a giant 30-billion-euro emergency aid mechanism for debt-plagued Greece on Sunday (11 April) but stressed Athens had not requested the plan be activated yet.

Together with at least 10 billion euros expected from the International Monetary Fund in the first year, it could add up to the biggest multilateral financial rescue ever attempted.

“With today’s decision, Europe sends a very clear message that no one, any longer, can play with our common currency, no one can play with our common fate,” Greece’s Prime Minister George Papandreou said in a statement yesterday.

In a rare weekend telephone conference, finance ministers of the 16 nations that share the single European currency backed a detailed plan for Greece to borrow from eurozone governments and the IMF at significantly below market rates.

“The programme will cover a three-year period. The euro area member states are ready to contribute for their part up to 30 billion euro in the first year to cover financing needs in a joint programme to be designed with and cofinanced by the IMF,” the EU finance ministers and the European Commission said in a joint statement.

A Greek Finance Ministry official said it was logical to expect the package would amount to significantly more than 40 billion euros over three years. Earlier in the day, he had said it could hit 80 billion euros, but later corrected this.

If Greece obtains aid, the package could dwarf past IMF bailouts for Mexico and Argentina. The largest IMF commitment ever made to a country was the $47 billion arrangement for Mexico approved in April 2009 under a so-called flexible credit line. Mexico has not drawn from the credit line.

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