The European Union has agreed to a massive rescue package that will total nearly one trillion dollars in an effort to “regain lost credibility with investors.” The EU will provide more than $560 billion in new loans, and $76 billion via an existing lending program. Elena Salgado, the Spanish finance minister, said the International Monetary Fund will be handing over up to $321 billion as well.
President Obama spoke to German chancellor Angela Merkel and French president Nicolas Sarkozy today, and the deal is derived in part from the similar U.S. approach during the 2008 financial crisis.
"Officials are hoping the size of the program - a total of $957 billion - will signal a 'shock and awe' commitment that will be viewed in the same vein as the $700 billion package the United States government provided to help its own ailing financial institutions in 2008."
The IMF also approved today the fund’s $38 billion loan to Greece, which officials said would “take care of Greece’s financing needs” through 2012.