Europe pressed closer to raising the value of all of its bailout funds to a total of $1.3 trillion. Many economists believe that this sum will calm the global capital markets. There is still worry that the amounts of money have been inadequate until now because of the threats of financial collapses in Spain and Portugal.
Governments in the region will set a new European Stability Mechanism which will be a permanent facility with an initial balance of 500 billion euros. A temporary fund of over 200 billion euros will remain in existence. The possibility that the funds might be created has helped move bond yields paid by some troubled nations down. The money, however, cannot offset political turmoil in some of these countries in which many citizens want to see leaders who have accepted austerity measures in exchange for bailout funds to be dislodged.