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Sunday, May 09, 2010

Europe: Agreement Reached

by Calculated Risk on 5/09/2010 08:32:00 PM

Press Conference has started. Note: 9:03 PM ET: Press conference is over. There will be an archived video soon.

Signed Greek deal. Create €60 billion fund based on article 122 (special circumstances). Plus create Special Purpose Vehicle for 3 years (SPV) based on intergovernment agreement. The additional amount is up to €440 billion, so €500 billion - plus a contribution from the IMF up to half of European Union contribution (up to €220 billion). Plus apparently agreements from Portugal and Spain to take steps to reduce deficit.

UPDATE: ECB to take significant steps (hasn't been announced yet). EU representative said ECB will be buying secondary securities - but wait for ECB for announcement.

UPDATE2: There is a €30 billion IMF portion to the initial fund - so the total is €750 billion. The ECB announcement tonight could be significant.

Bloomberg: EU Crafts $928 Billion Show of Force to Halt Crisis
WSJ: EU Approves €720 Billion Bailout
Bloomberg: Rehn Says ECB Has Decided to Intervene in Secondary Market

Note: earlier post is the weekly summary and a look ahead.