Europe rewrites its rule book in creating fund to contain financial crisis
By Howard Schneider Washington Post Staff Writer
Tuesday, May 11, 2010
ATHENS -- The massive emergency fund assembled to defend the value of the euro is backed by a political gamble with an uncertain outcome: that European governments will rewrite a post-World War II social contract that has been generous to workers and retirees but has become increasingly unaffordable for an aging population.
The trillion-dollar program, to be underwritten largely by the 16 nations that use the euro and by the International Monetary Fund, represents a virtual discarding of Europe's rule book.
Under the rescue unveiled early Monday, governments that broke the currency union's spending restrictions are being offered a commitment of solidarity, with weak links such as Greece and Portugal supported by the creditworthiness of Germany's strong economy. more