The European Union has agreed a 750-billion euro package to protect the single currency and eurozone countries from the “wolfpack” of financial markets.
The deal came in the early morning after 11 hours of talks. The European Commission and finance ministers were determined to reach an accord before Monday trading.
The global rescue package is to be made up of 440 billion euros from member states, 60 billion euros from the EC and a further 250 billion euros from the International Monetary Fund.
On top of that, the European Central Bank says it will now buy eurozone government and private debt. And there are plans to form a European Monetary Fund.
European Commissioner Olli Rehn told journalists: “A European Monetary Fund has various formats in the political debate. We will come up with concrete proposals on Wednesday, the day after tomorrow, and the task force presided by President Herman Van Rompuy will certainly discuss this issue very thoroughly.”
The deal comes after a week which saw the euro plummet to a 14-month low as markets pounced on a perceived lack of united action by the EU to Greece’s debt crisis.
Going into the meeting, the Swedish finance minister criticised what he called the “wolfpack” behaviour of speculators.
At a press conference after the agreement was reached, Spanish Finance Minister, Elena Salgado, said: “We added, in our conclusions, the need to make rapid advances on market regulation. Also on the control of the financial system, especially concerning derivatives and the role of rating agencies.”
While the crisis may have started in Greece, Spain, Portugal and Ireland found themselves prey to market speculation last week.
The euro surged on Asian markets as the rescue package was announced.