Business Today

Archive for May, 2010

European Union officials and the IMF has approved the establishment of aid worth 1 trillion dollars to maintain the stabilization of global financial markets and prevent the crisis spreading to Greece other countries in Europe and destroy the euro exchange rate. (5.10)

European officials last week shocked after the euro exchange rate declined sharply against the dollar. Single currency in Europe on the day this past Dictionary decreased to the lowest level since March 5, 2009 date and then, in the position of 1.2519 dollars. Meanwhile, bond yields in Portugal and Spain tended to increase sharply.

These conditions have raised concerns that the potential for systemic impact on the financial sector in Europe and the world. Responding to the matter at the end of last week officials of the European Union, ECB, and IMF Committee held a meeting to discuss the current situation in the region.

The result of this meeting was the establishment of emergency funds worth 750 billion euros (962 billion dollars). This emergency fund is intended to fend off speculators attacks against the euro. They are also intended to avoid the Greek crisis spread to other countries in the European region. This decision has brought the euro rebounded from lows in the last 14 months.

Decision of the formation of an emergency fund worth 750 billion euros is far exceeded market expectations. Previously, the market predicts emergency funding only amounted to 500 billion euros. According to the Monetary Affairs Commissioner Olli Rehn EU and French Finance Minister Christine Legarde, forming a fantastic amount of aid funds is a real commitment from the EU to “defend” its currency.