$1.0t aid package for Eurozone nations

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From Fazle Rashid
NEW YORK, April 10: Fearing indecisiveness and reluctance could plunge the global economy into another tearing recession European leaders announced an aid package of $1.0 trillion to help struggling eurozone nations to confront the debt crisis that has engulfed the region and threatened to spread worldwide.
The urgency of the leaders was reflected in the fact that the finance ministers of the European Union began their meeting Sunday evening which lasted well into early hours of Monday. The aid package includes a fresh commitment of $560 billion and $76 billion earlier announced. The International Monetary Fund is likely to provide $321 billion separately.
The size of the programme -- 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 provided to help its own financial institutions in 2008, the New York Times in a front page report said today. The package is much higher than expected and represented an audacious step for a bloc that has been criticised for acting tentatively and without unity in the face of mounting crisis, the same report said.
All assistance would carry stringent conditions to be set by the IMF. Country's drawing on the loan would have to adopt the same kind of deficit cutting measures that Greece has agreed to implement. The analysts are expecting European Central Bank announcing its own dramatic measures.
Underscoring the urgency of the matter President Obama spoke to German Chancellor Angela Merkel and French President Nicolas Sarkozy about the need to act decisively to restore the confidence of the investors.
US Federal Reserve, ECB and the central banks of Canada, Britain and Switzerland have agreed to form swap -lines with the goal of easing pressure on European banks and money markets by providing more liquidity.
New political developments in Germany where Angela Merkel's party suffered defeat in regional elections and a coalition government in Britain could add to the challenges. European companies have written off debts of $386 billion in the past 12 months because of late payment imperilling many small companies, a reputed paper said.