A rescue plan for the Eurozone is slowly taking shape according to sources from the International Monetary Fund.
The BBC reports that the new plan is expected to involve writing off 50% of Greece’s debt, as well as increasing the European Union bailout fund to 2 trillion Euros.
While turning the plan into a reality will be difficult, European governments are hoping the plans will be n place in the next five to six weeks.
However if the plans fail, it could turn current levels of poor growth into a recession or worse.
The G20 have also reasserted a commitment to a co-ordinated response to the crisis, though have yet to release details of how they plan to alleviate market stress.
The eurozone banks are also expected to be strengthened, as it is believed that many don’t have enough capital to absorb losses. Nonetheless, many MPs in eurozone member states believe this could put taxpayers much more at risk.
Greece has pledged to stay in the Eurozone, but the Greek government does not believe that their presence is strong enough to affect other economies within it.
EU and IMF officials will return to Greece this week to check on the country’s deficit reduction progress.
If the country is not meeting its spending cut targets, there is a real possibility that the stricken country will not receive its next batch of IMF money.