Greece can draw on $40 billion from the other 15 members of the eurozone European Union finance ministers have given final approval to a loan rescue package for debt-ridden Greece, which can be activated at Athens’ request.

If it triggers the rescue mechanism, Greece will be able to draw on $40 billion from the other 15 members of the eurozone at an interest rate of 5 per cent.

he plan is designed to reassure financial markets and prevent Greece from going bankrupt, and was announced after the finance ministers discussed Greece’s plight during an emergency video conference.

The 5 percent interest rate would be more than 2 per cent lower than the rates being demanded by the international markets.

Greece is still hopeful that it will not have to turn to the EU and the International Monetary Fund for assistance, but investors believe it will have little choice if it is to avoid bankruptcy.

Jean-Claude Junker, the chairman of the eurozone finance ministers,
said in London’s The Independent all the members will take part in the mechanism, adding the
move was not a violation of the “no bailout” clause in the EU treaty as
it is made up of loans that are to be repaid, rather than subsidies.
“Today’s decision is meant to encourage Greece to return as soon as
possible to a normal financing system,” he said.

Countries including
Spain and Ireland who are also facing a financial crisis of sorts, will contribute but their circumstances would be
“taken into account,” Commission officials said as reporrted in The Independent.

Eurogroup chairman Jean-Claude Juncker insisted the mechanism did not violate the European Union treaty and did not constitute a subsidy.