UPDATE 2-EU announces 750-bln euro crisis shield with IMF

* EU ministers agree on emergency measures

* Mechanism includes loans and loan guarantees

* IMF also involved; ECB to buy euro zone debt

(Edits, adds details of ECB moves)

BRUSSELS, May 10 (BestGrowthStock) – European Union finance
ministers agreed an emergency loan package on Monday that with
IMF support could reach 750 billion euros ($1,000 billion) to
prevent a sovereign debt crisis spreading through the euro zone.

The European Central Bank also announced steps to contain
Greece’s debt crisis, saying it would buy euro zone government
and private debt and abandoning resistance to full-scale bond
purchases.

“The fiscal efforts of the EU member states, the financial
assistance by the (European) Commission and by the member states
(and) actions taken today by the ECB prove we shall defend the
euro whatever it takes,” EU Monetary Affairs Commissioner Olli
Rehn told a news conference after more than 11 hours of talks.

The EU finance ministers announced a package consisting of a
special-purpose vehicle via which euro area states would
guarantee on a pro rata basis up to 440 billion euros, plus a
European instrument worth 60 billion euros.

Clarifying earlier statements, they said the International
Monetary Fund was expected to make a contribution of about 250
billion euros.

Economists have estimated that if Portugal, Ireland and
Spain eventually required similar three-year bailouts to that
received by Greece, the total cost could be 500 billion euros.

“This is not only about Greece but about stability in Europe
as a whole,” Rehn said.

The measures dwarf any previous attempts by the 27-country
EU or the 16-state single-currency group to calm what Swedish
Finance Minister Anders Borg described as the “wolfpack” of the
financial markets.

The moves were coordinated by the European financial
institutions and involved discussion among the Group of Seven
finance ministers, showing the global concern that problems that
began in Greece could cause havoc on world financial markets.

Greece, with a budget deficit of 13.6-14.1 percent of gross
domestic product in 2009 and debt of more than 115 percent of
GDP, already has secured a 110-billion-euro, three-year loan
package from the 16-country euro zone and the IMF.

The size of the deal agreed on Sunday, two days after a
summit of euro zone leaders, reflected the growing sense of
urgency in the EU and around the world that a sovereign debt
crisis could rapidly sweep global markets.

The ministers also called for budget consolidation,
sustainable finances, improved economic growth and closer
economic coordination. Plans for fiscal consolidation and
structural reforms would be accelerated where needed, they said.
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(Reporting by Julien Toyer, David Brunnstrom, Ilona Wissenbach,
Bete Felix, John O’Donnell and Justyna Pawlak; writing by
Timothy Heritage; editing by Michael Roddy and Dale Hudson)

UPDATE 2-EU announces 750-bln euro crisis shield with IMF