EU Leaders to Agree on Permanent Rescue Fund

EU Leaders to Agree on Permanent Rescue Fund

EU leaders will seal a pact regarding the permanent bailout fund for the European Union countries at a summit on Monday and are expected come up with an agreement regarding the budget allocation in the national legislation, alongside with its still unresolved conflicts in Greece which might affect the results of the discussions.

The summit which is the seventeenth in two years as the EU struggles to solve its debt problems will focus on creating jobs in order to address poverty.  It is expected to disclose that up to 20 billion euros ($26.4 billion) of unused funds from the EU's 2007-2013 national budget will be allocated for the project of job creation, especially among the youth.

Consultations between the private bondholders and the Greek government over the restructuring of the Greek debt made progress over the weekend, but are not expected to finish before the summit begins at 9:00 a.m. EST.

Until there is an agreement made between Greece and their bondholders, EU leaders cannot proceed with the 130 billion euro rescue agreement for Athens, which have been originally agreed upon at a summit in October.

As an alternative, they will sign a pact to create the European Stability Mechanism or ESM, a 500-billion-euro undeviating bailout fund which is expected to be operational in July, a year earlier than expected.

The International Monetary Fund concludes that an agreement to strengthen the eurozone defenses will persuade others to contribute more funds to the IMF, boosting its abilities in fighting crisis; thus, improving market outlook.

Posted by James Fried on Tuesday January 31 2012, 4:40 AM EST. Ref: CNN. All trademarks acknowledged. Filed under Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0