Europeans strike a money deal

European Finance Ministers on Sunday reached a deal in Brussels on support for the nations that use the common European currency, the euro. The accord is intended to call speculation against the currency to a halt.

The new plan includes a 750 billion Euro Support Fund. Loan guarantees will be provided to Euro zone nations to the tune of 440 billion euros. There are also 60 billion euros worth of loans provided by the European Commission.

In addition the International Monetary Fund is releasing a further 250 billion euros worth of credits. These will be raised via the central banks of the member states including the Bank of England, the American Federal Reserve and the Bank of Japan.

In future the European Central Bank, the ECB, will be able to purchase government bonds for which the market has dried up.

Under present legislation this cannot be done directly, but will be carried out via the commercial banks.

The plan is intended to combat speculation against government bonds issued by financially challenged countries like Portugal and Spain.

The matter came to a head following the Greek debt crisis and growing speculation against other Euro zone nations.

Last week the Euro countries already agreed a bail out for Greece worth 110 billion euros.

Victory over the markets?

Belgian Budget Minister, Guy Vanhengel (Flemish liberal), has welcomed the deal. He says that Europe's political class is showing its strongest side for once:

"I have the impression that for the first time the European political authorities have judged the scale of the problems correctly. Making 750 billion euros available in the form of loan guarantees or cash is no peanuts.

I feel that for the first time this game of arm wrestling that has now been going on for several weeks between European political authorities and the financial markets has been won by the politicians."