Fear Eurozone debt could be spreading
The price of shares have fallen in Asia amid fears that the economic crisis could now spread to Italy and Spain.
The BBC has reported that the Bank of Tokyo has downgraded its growth estimates after the tsunami in March. The market also fell 4% in Italy.
Ministers will now work together to adopt measures to help the Eurozone, including enhancing the flexibility and scope of the EFSF, while lengthening loan maturity and lowering interest rates.
They will also discuss how much banks and financial institutions will be able to contribute to the rescue package, though it was made clear that the IMF had not yet decided on the terms of the second Greek bailout.
Italy is now moving ahead with an austerity budget which will cost 48 billion Euros in budget cuts over the next three years. This has now increased fears that Italy could be the next country to require a bailout package, especially after Silvio Berlusconi indicated that the austerity package might not have full cabinet support.
Banking expert Jean-François Robin was quoted as saying: “We find ourselves at one of the worst moments of the European monetary crisis.
“The idea of a contagion from the Greek crisis to other Eurozone countries like Italy and Spain is gaining ground.”