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After 11 hours of negotiations, finance ministers of the European Union’s 27 member countries on early Monday monring adopted a 750 billion euro package to defend the euro currency and the economies that use it. The package followed the 110 billion euro loan package to Greece approved last Friday by the 16 euro-zone countries.

It shows the EU’s determination to stop the shock effects of Greece’s sovereign debt crisis from spreading to other euro-zone economies. Spain and Portugal are known to be suffering from financial troubles. The latest package will help any troubled country that is having difficulty borrowing money in financial markets.

After the package was announced, stock markets rebounded and the euro recovered. How quickly the package takes effect is important. EU national leaders must persuade their parliament and people to accept their country’s share of the burden for the package so that necessary domestic procedures are completed promptly. More important is that the Greek government, in good faith, tackle problems such as a bloated public sector, the high wages and pensions of public servants, and the underground economy.

Under the package plan, the 16 euro-zone countries will provide 440 billion euro and the European Commission, 60 billion euro. For its part, the International Monetary Fund is expected to contribute up to 250 billion euro.

Meanwhile, the European Central Bank, has decided to buy government bonds issued by euro-zone countries despite its traditional resistance to such moves.

The central banks of the United States, Japan, Britain, Canada and Switzerland, as well as the ECB, also have agreed to restart a dollar-swap arrangement by which the dollar is injected into domestic markets to cope with increased demand for the currency as a result of investors moving out of the euro. This step is similar to that taken after the bankruptcy of Lehman Brothers Holdings Inc. triggered the global financial crisis in the fall of 2008.

These measures may contribute to restoring short-term market confidence in the euro. The most important thing is that euro-zone governments strengthen their economic and financial discipline.

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