Eurozone bailout 'helped avoid repeat of Lehman Brothers' collapse'

11 May 2010

The €750 billion ($975 billion) bailout agreed for countries in the eurozone may have been vital in helping to avoid a repeat of the collapse of Lehman Brothers.

Michael Baxter, editor of Investment Business News, said the huge amounts being promised to prop up the financial system in Europe are comparable to the banking bailouts of 2008.

He stated that sometimes leaders have to make the choice between "the lesser of two evils".

"This probably suggests things were more serious than we realised and that maybe we were much closer to a Lehman Brothers mark two type collapse than was commonly understood," he added.

Mr Baxter said that not all the money that has been pledged to the financial package will necessarily be used, but the funding will allow countries such as Spain and Portugal to pay off their debts.

The deal was achieved after an 11 hour negotiation between finance ministers from across the continent earlier this month.

By Gary Cooper

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