The International Monetary Fund's executive board approved a record 30-billion-euro loan Sunday for Greece, whose debt woes have shaken global financial markets.
"The IMF executive board has concluded its discussion on Greece and approved a three-year stand-by arrangement for a total amount of SDR (Special Drawing Rights) 26.4 billion (30 billion euros)," the fund said in a statement.
Meanwhile, EU finance ministers were locked in late-night talks Sunday in Brussels to consider a (up to) 500-billion-euro emergency bailout package for threatened members of the 16-nation eurozone.
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It would be made up of 440 billion euros, if necessary, from eurozone countries and the IMF, on top of 60 billion euros of loan funds from the European Commission, the executive for the EU's 27 member states.
Bailout of Greece after rollercoaster week
The action came at the end of a week that saw the euro plunge and financial markets reel amid uncertainty over whether Greece could implement deeply unpopular austerity measures and stave off bankruptcy.
The IMF loan is part of a larger 110-billion-euro package offered in conjunction with 15 eurozone nations in exchange for austerity measures that sparked violent street protests in Athens.
The loan "is the biggest ever in relation to the country's quota in the IMF (32 times, or 3,200 percent of quota), and also the biggest non-precautionary loan ever approved by the IMF," a fund spokesman told AFP.
He said two previous loans to Mexico and Brazil were bigger "but they were both precautionary (the country has the option to draw upon it) and were not drawn."
Greece needs the cash to flow soon
Greece hopes funds from the bailout loan will start flowing before its next maturing debt payment on May 19 so as to avoid a default.
The IMF said that, under the agreement, 20 billion euros would be immediately available to Greece from the IMF and the EU. Total financing for Greece this year from the fund and EU would come to about 30 billion euros.
It is hoped the IMF-EU loan package will save Greece from bankruptcy as it deals with its colossal, 300-billion-euro public debt that has precluded its borrowing from financial markets.
Athens in turn has vowed 30 billion dollars in budget cuts through a series of tough and unprecedented austerity measures, to push the public debt below the three percent of gross domestic product limit set by the Eurozone Stability Pact, by 2014.
"The Greek government should be commended for committing to an historic course of action that will give this proud nation a chance of rising above its current troubles and securing a better future for the Greek people," IMF Managing Director Dominique Strauss-Kahn said in a statement.
"The road ahead will be difficult, but the government has designed a credible program that is economically well-balanced, socially well-balanced - with protection for the most vulnerable groups - and achievable," Strauss-Kahn said.
"Implementation is now the key," he added.
The IMF chief said the fund and the EU were providing "an unprecedented level of support to help Greece in this effort and - over time- to help restore growth, jobs and higher living standards."
