Greece gets first instalment of aid package
Thursday, 20 May 2010
From Fazle Rashid
NEW YORK, May 19: Greece received first instalment of 14.5 billion euros yesterday under the rescue package unveiled by the European Union in conjunction with the International Monetary Fund (IMF). Germany has contributed euros 4.4 billion and France euros 3.3 billion to the aid package. IMF has paid 5.5 billion euros.
The bailout package includes euros 110 billion for Greece and 750 billion for other euro zone countries suffering similar economic ailments like Portugal and Spain. The European Central Bank started buying public and private sector bonds. ECB has bought 16.5 billion euros of such debts.
The Greek debt crisis is pinching corporate credit, especially for medium and small size businesses. If the credit crunch persists it could slow European growth, hold down tax receipts making it harder for countries like Greece, Portugal and Spain to get their debt under control.
The ECB has sought to keep credit flowing by allowing banks to borrow it at 1.0 per cent interest. ECB president Jean-Claude Trichet frequently reminds banks that he expects them to lend this cheap money to businesses to foster growth.
Germany slapped a ban on short-selling of stocks as it encourages " destabilising speculations" in the financial markets. It would apply to eurozone sovereign bonds and credit default swaps. The euro dropped more than one percent against the dollar reaching a new four-year low of $1.22.
NEW YORK, May 19: Greece received first instalment of 14.5 billion euros yesterday under the rescue package unveiled by the European Union in conjunction with the International Monetary Fund (IMF). Germany has contributed euros 4.4 billion and France euros 3.3 billion to the aid package. IMF has paid 5.5 billion euros.
The bailout package includes euros 110 billion for Greece and 750 billion for other euro zone countries suffering similar economic ailments like Portugal and Spain. The European Central Bank started buying public and private sector bonds. ECB has bought 16.5 billion euros of such debts.
The Greek debt crisis is pinching corporate credit, especially for medium and small size businesses. If the credit crunch persists it could slow European growth, hold down tax receipts making it harder for countries like Greece, Portugal and Spain to get their debt under control.
The ECB has sought to keep credit flowing by allowing banks to borrow it at 1.0 per cent interest. ECB president Jean-Claude Trichet frequently reminds banks that he expects them to lend this cheap money to businesses to foster growth.
Germany slapped a ban on short-selling of stocks as it encourages " destabilising speculations" in the financial markets. It would apply to eurozone sovereign bonds and credit default swaps. The euro dropped more than one percent against the dollar reaching a new four-year low of $1.22.