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EU faces 10 crucial days for rescue

Fund leveraging rules agreed on, Greece gets one more installment.

business Updated: Nov 30, 2011 20:52 IST

Europe faces a crucial 10 days to save the euro zone after agreeing to ramp up the firepower of its bailout fund but acknowledging it may have to turn to the International Monetary Fund for more help to avert financial disaster.

"We are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union," Economic and Monetary Affairs Commissioner Olli Rehn said on Wednesday as EU finance ministers met.

Euro zone ministers agreed on Tuesday night on detailed plans to leverage the European Financial Stability Mechanism (EFSF), but could not say by how much because of rapidly worsening market conditions, prompting them to look to the IMF.

Italian and Spanish bond yields resumed their inexorable climb towards unsustainable levels on Wednesday, as markets assessed the rescue fund boost as inadequate.

Greece gets cash
The Eurogroup ministers agreed to release their portion of an 8 billion euro aid payment to Greece, the sixth instalment of 110 billion euros of EU/IMF loans agreed last year and necessary to help Athens stave off the immediate threat of default.

Juncker said the money would be released by mid-December, once the IMF signs off on its portion early next month.

Record unemployment at 10.3% in Oct
Eurozone unemployment rose to an all-time record of 10.3% in October, official figures showed on Wednesday as the indebted 17-nation bloc falls towards a recession.

The Eurostat data agency estimated that nearly 16.3 million men and women were out of work last month after the ranks of the unemployed rose by 126,000 compared with September.

Euro zone inflation at 3% for third month
Inflation in the 17-nation euro area remained at 3% for the third consecutive month in November, according to a first estimate, suggesting the European Central Bank(ECB) may have to consider delaying a further interest rate cut.

The EU statistics office Eurostat said that consumer prices rose by 3.0% in November, the same rate as in September and October.

AP and Reuters

First Published: Nov 30, 2011 20:49 IST