Emergency talks in Brussels on May 10 2010 among EU finance ministers produced agreement on a 500 billion euro package to stabilise the euro and prevent the Greek debt crisis from unravelling vulnerable economies in countries in the 16-member zone that uses the euro. The talks were conducted with urgency with the aim of achieving a deal before most Asian markets opened on May 11. The sum is made up of 440 billion euro in loan guarantees, 60 billion euro in European Commission emergency funds. The International Monetary Fund is to contribute a further 250 billion euro to the total. Spanish finance minister Elena Salgado called the package a euro-stabilisation mechanism. It consists of bilateral loans and loan guarantees, the Voice of America said. Economic Affairs Commissioner Olli Rehn said the agreement proved "we shall defend the euro whatever it takes", the BBC said. Markets in Tokyo and Sydney were both higher as the announcement of a deal was made in Brussels. In a statement after the meeting, the council of EU finance ministers said that in the wake of the crisis in Greece, the situation in financial markets is fragile "and there was a risk of contagion which we needed to address". "We have therefore taken the final steps of the support package for Greece, the establishment of a European stabilisation mechanism and a strong commitment to accelerated fiscal consolidation, where warranted." First, following the successful conclusion of procedures in euro area member states and the meeting of euro area heads of state or government, the way has been cleared for the implementation of the support package for Greece, the minister said. The Commission said that it had signed, on behalf of the euro area member states, the loan agreement with Greece and the first disbursement will proceed, as planned, before May 19 2010. "The Council strongly supports the ambitious and realistic consolidation and reform programme of the Greek government." The finance ministers said that they were "strongly committed" to ensuring fiscal sustainability and enhanced economic growth in all member states and therefore had agreed that plans for fiscal consolidation and structural reforms would be accelerated, where warranted. "We therefore welcome and strongly support the commitment of Portugal and Spain to take significant additional consolidation measures in 2010 and 2011 and present them to the 18 May Ecofin Council." The adequacy of such measures will be assessed by the Commission in June in the context of the excessive deficit procedure, the statement said. The ministers welcomed the commitment to announce, by the May 18 Ecofin Council, structural reform measures aimed at enhancing growth performance and thus indirectly fiscal sustainability henceforth. The statement said that the European stabilisation mechanism was being set up in terms of EU treaty rules which foresee financial support for member states in difficulties caused by exceptional circumstances beyond member states' control. "We are facing such exceptional circumstance today and the mechanism will stay in place as long as needed to safeguard financial stability." The mechanism will operate without prejudice to the existing facility providing medium term financial assistance for non euro area member states' balance of payments, the finance ministers said. In addition, euro area member states were standing ready to complement such resources through a Special Purpose Vehicle that is guaranteed on a pro rata basis by participating member states in a co-ordinated manner and that will expire after three years, respecting their national constitutional requirements, up to a volume of 440 billion euro. The IMF will participate in financing arrangements and is expected to provide at least half as much as the EU contribution through its usual facilities in line with the recent European programmes, the EU finance ministers said. "At the same time, the EU will urgently start working on the necessary reforms to complement the existing framework to ensure fiscal sustainability in the euro area, notably based on the Commission Communication to be adopted on May 12 2010," the finance ministers' statement said. "We underline the importance that we attach to strengthening fiscal discipline and establishing a permanent crisis resolution framework. "We underlined the need to make rapid progress on financial market regulation and supervision, in particular with regard to derivative markets and the role of rating agencies," the ministers said. "Furthermore, we need to continue to work on other initiatives, such as the stability fee, which aim at ensuring that the financial sector shall in future bear its share of burden in case of a crisis, also exploring the possibility of a global transaction tax. We also agreed to speed up work on crisis management and resolution."In a statement released on May 10 2010, the European Central Bank (ECB) said that its governing council had decided on several measures to address the severe tensions in certain market segments which are hampering the monetary policy transmission mechanism and thereby the effective conduct of monetary policy oriented towards price stability in the medium term. The measures will not affect the stance of monetary policy, the ECB said. The governing council said that it had decided to conduct interventions in the euro area public and private debt securities markets (Securities Markets Programme) to ensure depth and liquidity in those market segments which are dysfunctional. "The objective of this programme is to address the malfunctioning of securities markets and restore an appropriate monetary policy transmission mechanism." The scope of the interventions will be determined by the governing council, the ECB said. "In making this decision we have taken note of the statement of the euro area governments that they ‘will take all measures needed to meet [their] fiscal targets this year and the years ahead in line with excessive deficit procedures' and of the precise additional commitments taken by some euro area governments to accelerate fiscal consolidation and ensure the sustainability of their public finances." In order to sterilise the impact of the above interventions, the ECB said, specific operations will be conducted to re-absorb the liquidity injected through the Securities Markets Programme. This would ensure that the monetary policy stance would not be affected, the ECB said. The governing council also decided to adopt a fixed-rate tender procedure with full allotment in the regular three-month longer-term refinancing operations (LTROs) to be allotted on May 26 and on June 30 2010. The council said that it had decided to conduct a six-month LTRO with full allotment on May 12 2010, at a rate which will be fixed at the average minimum bid rate of the main refinancing operations (MROs) over the life of this operation. The ECB governing council decided reactivate, in coordination with other central banks, the temporary liquidity swap lines with the US federal reserve, and resume US dollar liquidity-providing operations at terms of seven and 84 days. These operations will take the form of repurchase operations against ECB-eligible collateral and will be carried out as fixed rate tenders with full allotment. The first operation would be carried out on May 11 2010, the ECB said.