OECD Paper: Europe Needs $1.3 Trln Bailout Fund

Published February 2, 2012 4:00PM (EST)

PARIS (AP) — The economic organization that represents developed countries says Europe probably needs a euro1 trillion ($1.3 trillion) bailout fund if it is to stop the spread of its debt crisis.

A paper released Thursday by the Organization for Economic Cooperation and Development lays out a list of steps Europe has to take "if a fracturing of the euro is to be avoided."

It includes making sure banks have enough money to weather the storm; forcing the private holders of Greek debt to take at least a 50 percent loss on their bonds; and increasing the size of the bailout fund, which will have euro500 billion when it comes into effect.

The paper also detailed ways the fund could raise money, saying that private investors would be unlikely to put up the cash.

By Salon Staff

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