Part 10: The trillion-dollar failure

By Henry CK Liu

This is the 10th article in a series.
Part 1: The crisis of wealth destruction
Part 2: Banks in crisis: 1929 and 2007
Part 3: The Fed's no-exit strategy
Part 4: Fed's double-edged rescue
Part 5: Too big to save
Part 6: Public debt - prudence and folly
Part 7: Global sovereign debt crisis
Part 8: Greek tragedy
Part 9: Greek crisis, German politics

At the close of an emergency Sunday meeting of financial ministers from the 27-member European Union (EU) that lasted until the early hours of Monday, May 10, 2010, the exhausted attendees emerged to announce a startling nearly 750 billion euro (US$1 trillion) financial stabilization package for EU member states with sovereign debt problems and the European Monetary Union (EMU) to restore market confidence in the euro, its common currency for the 16-country eurozone.

Immediately after foreign exchange markets opened several hours later on the same day, the dramatic news caused the euro to soar against the dollar and the yen, reversing its recent sharp decline as fallout from the sovereign debt crisis in Greece.