EU Nearing IMF Loan Deal

Wall Street Journal
December 8, 2011

The European Union is nearing a deal to lend €200 billion ($268.26 billion) to the International Monetary Fund—including €150 billion coming from the 17-nation euro zone—that the IMF could then use to shore up the troubled euro-zone sovereign debt market, euro-zone officials said Thursday.

EU leaders will make final decisions on the proposal at their summit meeting starting Thursday as part of a larger deal they hope will prevent a collapse of the euro zone. The €150 billion will come from bilateral loans from the euro zone's central banks to the IMF, while another €50 billion in loans would come from noneuro-zone EU countries, an EU diplomat said.

Half of the money might be sent to a special IMF fund reserved for lending to the euro zone, while the other half would go to the IMF's General Resources Account, officials said. Funds in the IMF's general resources are available for lending to governments around the world.

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