IT is a cherished Brussels maxim that the European Union takes its greatest leaps forwards in a crisis—and then only after several false starts. Thus for Euro-optimists, the fact that it has taken EU leaders nearly three months to deliver a promised rescue package for Greece is less important than the fact that on May 2nd the block finally leapt, setting in motion the biggest sovereign bail out plan in EU history.
Meeting in Brussels, finance ministers from the 16 countries that use the single currency accepted the need to stump up more than €110 billion ($146 billion) over the next three years. In effect, the rescue funds (€80 billion from the eurozone buttressed by €30 billion from the International Monetary Fund) will replace commercial borrowing from the financial markets between now and 2012. The hope is that will buy Greece time to bring its deficit under control through savage cuts in public spending: Greece has agreed to austerity measures worth 13% of national income over the next four years.
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