After attempts at smaller and less well-defined support mechanisms for Greece failed to stabilize markets, EU and International Monetary Fund (IMF) leaders announced on May 2 a joint € billion support package. This international financing package is the largest ever extended to a single country and amounts to about 50 percent of Greece’s GDP.
In return, Greece was expected to implement an aggressive, front-loaded consolidation program to reduce its budget deficit from double-digit rates to less than 3 percent of GDP between now and 2014, with one-half of that reduction occurring this year alone. The announcement of this package did not stave off market pressures, and by then the concerns of investors had already moved well beyond Greece.