Greece accepts unprecedented bailout from EU and IMF

Euro region finance ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, Jean-Claude Juncker, who heads the group of euro-region finance ministers, told a press conference today. Euro members will pay 80 billion euros and the International Monetary Fund contributes the rest. Greece today agreed to austerity measures worth 13 percent of gross domestic product.

“It’s an ambitious program, it’s austere but it’s absolutely necessary,” said Juncker, who chaired the meeting today. European Central Bank President Jean-Claude Trichet, speaking at the same press conference, said Greece’s plan will “help to restore confidence and safeguard financial stability in the euro area.” European Union leaders will meet on May 7.

Policy makers agreed to the unprecedented bailout after investors’ concerns about a potential Greek default sparked a rout in Portuguese and Spanish bonds this week and sent stock markets tumbling. At stake is the future of the euro 11 years after its creators left control of fiscal policy in national capitals.

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