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Eurozone agrees to support struggling banks

in International Business

Eurozone agrees to support struggling banks

Eurozone agrees on bank recapitalization by using the Eurozone’s planned bailout fund, without adding to government debt.

The decision will be implemented on 9th of July.

The Eurozone also agreed to set up a joint banking supervisory body for the Eurozone.

Analysts say Germany appears to have given ground after pressure from Spain and Italy to provide more support.

Chancellor Angela Merkel has managed to ensure that Brussels has more control over the finance of Eurozone countries, something she had wanted.

French President Francois Hollande also appeared to back Italy and Spain up.

“I’m here to try to find rapid solutions for those countries facing pressure from the market, despite having made huge efforts to balance their budgets,” the socialist French president said.

    A 10bn-euro boost of capital for the European Investment Bank, expected to raise overall lending capacity by 60bn euros

    Targeting 60bn euros of unused structural funds to help small enterprises and create youth employment

    A pilot launch of EU project bonds worth 4.5bn euros for infrastructure improvements, focusing on energy, transport and broadband.

The plan envisages the creation of a European treasury, which would have powers over national budgets.

Chancellor Merkel warned that there is no “magic formula” to solve the crisis, hence, fiscal responsibility and tighter regulation must come first.



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