Euro up after Greece aid package

| March 26, 2010 | 0 Comments
Euro up after Greece aid package

The euro has recovered from a 10-month low today after the two-day EU summit, which commenced in Brussels yesterday, saw a deal reached to help Greece through its debt crisis.

According to Brussels, the package will total €22 billion (£20 billion) and will include help from the International Monetary Fund (IMF).

So far the euro zone has avoided seeking an IMF loan for Greece, opting for a solution closer to home to maintain global confidence in the euro.

However, the currency rose by 0.5% to $1.3364, while it also rose against the pound to 90.210p.

The ongoing uncertainty in Greece has recently pushed the euro to a 10-month low after concerns grew over how the country plans to cut its public deficit.

Greece currently has the highest debt of the 16-member euro zone, at €300 billion (£273 billion) and its economy is considered to be the euro zone’s weakest.

The country is currently taking action to reduce its public deficit from 12% to 8% of GDP this year.

In the meantime, fears have been raised for Portugal after international credit rating agency, Fitch, cut the country’s credit rating to ‘AA-’ with a negative outlook.

According to Fitch, Portugal’s prospects for recovery are weaker than its fellow nations in the euro zone, which could put pressure on public finances.

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