EU try to get loan deal
On Thursday euro-zone officials said the European Union is nearing a deal to lend €200 billion to the International Monetary Fund. It is including €150 billion coming from the 17-nation euro zone which the IMF could then use to shore up the troubled euro-zone sovereign debt market. EU leaders would make final decisions on the proposal at their summit meeting that starting on Thursday as the part of a larger deal that they hope will prevent a collapse of the euro zone. An EU diplomat said the €50 billion in loans would come from non-euro-zone EU countries while another €150 billion will come from bilateral loans from the euro zone’s central banks to the IMF.
The other parts of the deal being negotiated include lifting a €500 billion cap on lending from the euro zone’s sovereign-bailout funds. Doing so could provide up to €700 billion in lending for Spain, Italy and bank recapitalizations across the euro zone. One euro-zone official said Germany is resisting the idea. There are broad that supports among the governments for giving a banking license to the euro zone’s permanent bailout fund the European Stability Mechanism that would allow the ESM to get credit line from the European Central Bank. The official said Germany still opposes that idea as well.
