France, Germany Back EU/IMF Plan to Bailout Greece -WSJ
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A deal which will see the European Union and the International Monetary Fund working together to bailout Greece has been backed by France and Germany, according to reports coming out of the Wall street Journal.
At a summit of all 27 EU leaders in Brussels, an accord was reached that will direct a potential bailout of Greece, with the IMF contributing in a supporting role, according to unnamed sources cited by the Journal.
The leaders of the 16 euro zone nations were weighing the draft supported by French President Nicolas Sarkozy and German Chancellor Angela Merkel late on Thursday. The aid will not be automatic and will only go into effect if Greece needs it.
Greece will now have the specific assurances of European aid if need be, but the new Franco-German compromise gives EU leaders the final say on whether to deliver the support. According to the draft, euro zone countries must agree unanimously before aid can be given to Greece.
Merkel has insisted that aid will come from the EU and the IMF for Greece only as a last resort to save the country from economic collapse.
Greece has been pleading in recent weeks to change the interest rates of over 6 percent that the nation has been required to pay to borrow money. Greece’s Prime Minister George Papandreou has been seeking relief from the high interest rates for the country’s borrowing costs.
The compromise for a joint plan from the EU and the IMF would be a first for the euro zone, but along with the leaders of the regions two biggest economy, France and Germany, other European leaders have said that they would be open to the plan.
The provisions that have been included to give the leaders the final say on providing aid to Greece, are likely to have come from Germany, which has always prided itself on its frugality.
At a summit of all 27 EU leaders in Brussels, an accord was reached that will direct a potential bailout of Greece, with the IMF contributing in a supporting role, according to unnamed sources cited by the Journal.
The leaders of the 16 euro zone nations were weighing the draft supported by French President Nicolas Sarkozy and German Chancellor Angela Merkel late on Thursday. The aid will not be automatic and will only go into effect if Greece needs it.
Greece will now have the specific assurances of European aid if need be, but the new Franco-German compromise gives EU leaders the final say on whether to deliver the support. According to the draft, euro zone countries must agree unanimously before aid can be given to Greece.
Merkel has insisted that aid will come from the EU and the IMF for Greece only as a last resort to save the country from economic collapse.
Greece has been pleading in recent weeks to change the interest rates of over 6 percent that the nation has been required to pay to borrow money. Greece’s Prime Minister George Papandreou has been seeking relief from the high interest rates for the country’s borrowing costs.
The compromise for a joint plan from the EU and the IMF would be a first for the euro zone, but along with the leaders of the regions two biggest economy, France and Germany, other European leaders have said that they would be open to the plan.
The provisions that have been included to give the leaders the final say on providing aid to Greece, are likely to have come from Germany, which has always prided itself on its frugality.
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