Thursday, 8 December 2011

EU States to Send IMF $267 Billion in New Crisis Fight

European Central Bank President Mario Draghi cut interest rates and offered banks unlimited cash for three years while steering clear of any signal the ECB will buy more bonds to stem the region’s debt crisis.

Mario Draghi, president of the European Central Bank. 
Photographer: Hannelore Foerster/Bloomberg 

European Central Bank President Mario Draghi ECB President Mario Draghi
European leaders stepped up the fight against the debt crisis, channeling as much as 200 billion euros ($267 billion) to the International Monetary Fund and bowing to European Central Bank demands for a tightening of anti-deficit rules.

In an accord hailed by ECB President Mario Draghi, the leaders also laid out a new “fiscal compact” to prevent future debt runups and accelerated the startup of a planned permanent 500 billion-euro rescue fund.

“It’s a very good outcome for euro-area members and it’s going to be the basis for a good fiscal compact and more disciplined economic policy in euro-area countries,” Draghi told reporters after 12 hours of overnight talks in Brussels.

European leaders navigated a labyrinth of political, legal and economic constraints amid unrelenting pressure from financial markets to craft the new approach to fighting the two- year-old crisis, which now threatens to engulf Italy and Spain.

At the same time, the leaders ventured into untested legal territory by plotting to anchor the tougher budget rules in a separate euro-area treaty after Britain and Hungary balked at amending the existing treaty covering all 27 EU countries.

To contact the reporters on this story: James G. Neuger in Brussels at
Stephanie Bodoni in Brussels at
To contact the editor responsible for this story: James Hertling at