–Pact Now Needs Approval From Other Eurozone Leaders
BRUSSELS (MNI) – France and Germany have agreed on a deal to aid
Greece, which combines bilateral loans and International Monetary Fund
aid and will only be used as a last resort, EU and French diplomats said
Thursday.
European Council President Herman Van Rompuy now needs to put the
deal to other Eurozone government heads, who are currently attending an
EU summit in Brussels. An announcement could follow later Thursday, one
EU diplomat said.
Heavily-indebted Greece could need financial aid to refinance its
debt as it struggles to manage its budget deficit, which is currently
more than four times the EU’s stipulated 3% limit.
EU diplomats said German Chancellor Angela Merkel and French
President Nicolas Sarkozy had agreed Thursday afternoon that Greece
could tap bilateral loans from the Eurozone and aid from the
International Monetary Fund, but they stressed that this was only going
to be made available as a last resort.
Earlier Thursday Greek Prime Minister George Papandreou said
“Greece is determined to deal with its own problems, put its own house
in order.”
The French diplomat said the agreement was based upon the idea that
aid would only be tapped by Greece if the country ran in to “very
serious difficulties and there was no other solution.”
Senior ECB officials, including its President Jean-Claude Trichet
and Executive Board member Lorenzo Bini Smaghi have sharply criticized
the idea of tapping IMF financial assistance for Greece. Bini Smaghi
said Wednesday it could tarnish the credibility of the Eurozone and hurt
the euro itself.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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