Monday, 16 May 2011

Portugal bail-out goes ahead while Strauss-Khan is refused bail!

As the IMF managing director was remanded in custody in New York on charges of attempted rape and declared a flight risk, his colleagues were striking a deal for the eurozone's third rescue package.

 The ministers – along with the 10 EU finance ministers from outside the single currency, including chancellor George Osborne – agreed on a €78bn bailout for Portugal. They also signed off on the permanent eurozone bailout fund, the European stability mechanism, which is to shore up the currency from 2013.

Europe will provide Portugal a €52bn loan at a rate of around 5.5%, while the IMF will offer €26bn at 3.25%. The UK is on the hook for roughly £4.3bn. 

With governments reeling from French socialist Strauss-Kahn's arrest on charges of attempted rape, the meeting in Brussels was also the first chance for ministers to discuss who would be the next head of the IMF in Washington; the post is traditionally held by a European.

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