The European Union (EU) and the International Monetary Fund (IMF) have come up with 750 billion euros to help European countries that are having some money problems. There are some countries in Europe whose governments have spent more money than they have been making in recent years. As a result, these countries have borrowed money and have accumulated a big debt.
Greece was the first EU country whose debt problem became a very serious issue. Greece did not have money to pay back part of its loan that was due this month. When a country is unable to pay back its loan, it makes it harder for the country to get more loans. It can also reduce the value of its currency. Greece’s debt is a concern for some other European nations as well because Greece and 15 other European Union (EU) countries use the same currency called “euro”. If the euro’s value goes down, it will financially hurt these other countries as well.
The problem is even bigger since there are other countries that use the euro as a currency and also have large debts – for example, Spain and Portugal. That is why the EU and IMF have created a pool of money that countries who need help can borrow money from. In return, these countries will have to reduce the money they spend in the coming years so that they can start reducing their debt.
The euro (sign: €) is a relatively new currency – it was introduced on January 1, 2002. Since then, the euro has been adopted by 16 European Union countries and a few non-European Union countries as their currency. For example, Greece gave up its drachma to adopt the euro. The IMF is an international organization that lends money to countries with big financial problems.