Greek debt deal reached

France and Germany have reached a
deal on a financing plan to help debt-laden Greece, which will include IMF
help.

Officials in Brussels say the
package – yet to be agreed by other eurozone states – will total $31 billion.

The French presidency said there
would be “very precise conditions” under which the 16 eurozone
countries “could be led to intervene” to help Greece.

Co-ordinated bilateral loans and IMF loans
are envisaged. EU leaders are now poised to discuss the plan.

News of the deal broke as leaders
of the 27 EU member states gathered for a two-day summit in Brussels.

So far the eurozone has avoided
seeking an IMF loan for Greece, preferring a European solution and anxious to
maintain global confidence in the euro.

Germany’s Chancellor Angela Merkel has
said the German government “will press for emergency aid combining IMF and
joint bilateral aid from the eurozone but… only as a last resort”.

She has signalled reluctance to
offer Greece anything resembling a bail-out, which is not allowed under the
single currency rules.

She said Greece was not insolvent,
was acting to curb its deficit and was still able to raise money on international
markets.

She also said she would press for
the EU to amend its treaties to strengthen its ability to prevent future budget
crises.

Stressing the need to learn lessons
from the crisis, she wants a treaty change to allow sanctions to come into
force should a eurozone country ever default on its debts.

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