Fed, Bank of England help Europe bailout
TEXT OF STORY
The European Union has negotiated a $1 trillion rescue plan for Eurozone countries that get into trouble. The deal aims to stop the financial crisis in Greece from spreading to other countries which use the Euro. It was agreed after 10 hours of emergency meetings and the Federal Reserve and Bank of England have already pledged their support. In London, the BBC’s Rebecca Singer reports.
Rebecca Singer: The numbers are big. Richard Hunter is from Hargreaves Lansdowne and says the size of this package has helped reassure nervous investors.
Richard Hunter: Clearly after the uncertainty we’ve been seeing over the last three or four weeks at least it has very much given markets a shot in the arm.
The 16 Eurozone nations worked all night alongside the E.U. and IMF to agree this trillion-dollar deal. And once they’d decided to take action, the European Central Bank agreed to get involved too. It’s taking similar steps to the ones the Federal Reserve took at the beginning of 2009, when it started buying up government bonds. The aim of the ECB though, is to make more money available to European governments. But there’s still the issue of how to stop countries getting into financial trouble in the first place.
Justin Urquhart-Stewart of Seven Investment Management:
Justin Urquhart-Stewart: If the Euro really wants to gain credibility, it’s got to be able to instil that sort of discipline to make sure all the participants are moving in the same direction and nobody isn’t actually playing fast and loose with other people’s credit.
In a separate move, the U.S. Federal Reserve is going to make more dollars available to the European market if they’re needed.
In London, I’m the BBC’s Rebecca Singer for Marketplace.
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