There were smiles all round in Luxembourg as Eurozone finance ministers agreed a massive bailout plan for members who run into Greek-style debt problems.
The 440 billion euro slush fund will be available later this month, after debt guarantees are finalised.
The financial safety net will be worth up to 750 billion euros once an IMF commitment of 250 billion euros is included.
In a joint statement, eurozone nations said they would implement bigger cuts and tax increases if needed, and would also carry out “structural reforms” to slim down their running costs.
Members have also been warned about breaching the EU deficit limit of 3% of GDP.
In Brussels, President Herman Van Rompuy warned of swifter and tougher action:
“Sanctions would already kick-in before the three percent threshold for the annual deficit is reached, if warnings have been neglected or if the level of debt rises too quickly. To use the traffic light image, until now you have only been fined for driving through the red light of three percent, from now on you could also be in trouble for crossing the amber.”
The bailout plan is meant to counter investor fears that Spain, Portugal and/or others could follow Greece by needing a bailout to meet debt repayments.
The hope among member states is that it will never actually be needed.