EU Agrees to Rescue Greece

Greece's financial crisis threatens the stability of the Euro, has rattled the bond market, and may be responsible for a worldwide financial slump, but European Union leaders hope to help ease concerns by convincing investors that Greece won't be allowed to default on government debt. On Thursday, the European Council agreed on a political statement in support of the Greek government, but will leave the details to its finance ministers, who will meet on Monday. The tentative plan is for European nations to finance loans to Greece and draw on the International Monetary Fund to implement the loan and draw up conditions, although which countries will back the loan and how the loan will be structured remain unclear. The way the EU treats Greece is of special concern because it could set a precedent; if other countries bail out Greece, investors will expect a similar response should other weak European economies such as Portugal or Spain go under.