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BY NICHOLE CARTMELL
ANCHOR MEGAN MURPHY
European leaders have struggled to contain the eurozone’s financial crisis since 2009.
Now, there’s a plan in place. After 13½ hours of meetings this week, the
European Union summit has ended with a decision on the way forward. Here’s BBC with details.
“The eurozone bailout agency will be able to put money directly into struggling banks.
It won’t have to root the funds by a government, which would add to their debt burdens. And
the agency will be able to go into financial markets to buy government debt, or bonds.”
In terms of supply and demand, a reporter for Al Jazeera believes the decisions will
help struggling countries like Spain and Italy.
“They can sort of lower interest rate, the yield on those bonds and make it easier to
finance their activities... and bring down the market pressure that is bearing on them.”
But, this summit did not end without a fight. A reporter for Spiegel Online says, prior
to the meeting German Chancellor Angela Merkel insisted she would not make concessions. But
she eventually did.
“From the German perspective, however, that is but a small consolation. Mediterranean
countries, for their part, can celebrate a breakthrough. The euro zone's ‘mental block’
has been broken.”
Still, the bailout has been met with cheers from investors. Bloomberg Businessweek notes
the agreement immediately caused markets to rally.
“Spanish and Italian bonds surged after euro-area leaders expanded steps to stem the
debt crisis by easing repayment rules for emergency loans to Spain’s banks and relaxing
conditions on potential help for Italy.”
In spite of the market rally, Marketwatch points out attempts to stabilize European
markets might be limited.
“Analysts warned that questions remain over the effectiveness of the measures, while emphasizing
that they do little to address the root causes of the euro zone’s long-running debt crisis...
A market strategist tells Marketwatch [the fund] could well run out of money quite quickly.’”
And this agreement has one more big hurdle to clear. Germany’s parliament must approve
the plan in a vote Friday. A two-thirds majority vote is needed for the plan to be ratified.