EU Plan New Bailout Fund

In an agreement struck last night, European Union leaders are to approve a new permanent bailout fund.

A package of economic monitoring and surveillance measures will also been drawn to shore up the single currency.

The draft hopes to strengthen the economic governance and competitiveness of the eurozone and of the European Union.

However there are fears that in the coming weeks Portugal may join Ireland and Greece in seeking a bailout.

The agreement follows the resignation of Prime Minister, Jose Socrates, and the defeat of new parliament measures on Wednesday night.

Regarding changes to the Irish bailout, Taoiseach Enda Kenny said the Government are awaiting the results of banking stress tests, before striking an agreement.

European finance ministers will also decide on changes to Ireland's EU/IMF rescue deal after the results.

At the EU summit in Brussels, despite the current political crisis, Portugal has been urged by the ECB President Jean-Claude Trichet and German Chancellor Angela Merkel to stick to its fiscal targets.


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