Markets around the world are set to rally on Monday in response to European governments' agreement on a massive financial safety net for Greece, though the country will still struggle to resolve its debt crisis.
After two previous announcements this year failed to calm the markets, euro zone finance ministers on Sunday overcame deep political divisions and revealed a plan that appears generous and detailed enough to ease fears of a Greek debt default.
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Tom Pfeiffer | Getty Images View over the caldera of Santorini in Greece. |
The ministers approved a mechanism for their countries to extend up to 30 billion euros ($40 billion) of emergency loans to Greece. Athens has not decided whether to apply for the aid, but many analysts think it will have to do so.
Together with at least 10 billion euros expected from the International Monetary Fund in the first year, Greece may receive the biggest multilateral financial rescue ever.
"I think it will be a big boost to all markets, not only Europe but in Asia and here in the U.S. as well," said Alan Lancz, president of Alan B. Lancz & Associates, an investment advisory firm in Toledo, Ohio. "It was one of the clouds that prevented the U.S. (stock market) from breaking through to new highs, so lifting this barrier will be a big positive. We have a lot of money on the sidelines globally and this could be a big catalyst to bring some of that money in."REad more
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