EU Agrees on Rescue Plan for Greece

Breaking news reports have indicated that France and Germany have come to an agreement on a rescue plan for financially troubled Greece. The proposed safety net would total about 22 billion euros. ($29,230,116,554 USD) The net would only apply if Greece is unable to borrow. EU nations would provide bilateral loans and would also include “substantial” IMF loans. A majority of the funding would be European. A draft of the rescue plan says the Athens government “has not requested any financial support” and also says that “no decision has been taken to activate” to activate the rescue plan. Other breaking reports indicate a wider agreement among EU nations on a rescue plan for Greece. Greek government spokesman George Petalotis said that several EU countries have agreed on a rescue plan for Greece. Petalotis told reporters, “The plan meets our requirements fully … we agree. There is a very good plan which will be announced shortly. We consider it to be a message of stability and it will have a positive impact on the Greek economy.” When asked if EU nations were ready to sign the proposed agreement Petalotis stated, “Yes, they have agreed.” He also said that French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet, Greek Prime Minister George Papandreou and EU president Herman Van Rompuy have met to sort through the details of the agreement.

ECB to Loosen Collateral Rules

Reports indicate that the European Central Bank is ready to loosen collateral rules to help Greece to reduce its debt. A French spokesperson said that President Nicolas Sarkozy and German Chancellor Angela Merkel had met in private and agreed on “a text … which describes very precisely the conditions on which euro zone countries could be called upon to intervene.” Under the proposed agreement EU nations would provide a majority of the funding with strict conditions set by the European Commission and the European Central Bank and the IMF would provide money and its considerable expertise. Diplomats said that EU leaders may hold additional meetings on Thursday to discuss Greek aid.

Greek Crisis to Dominate EU Summit

Officially the EU summit is supposed to be officially concerned with the EU’s 10 year economic strategy and global warming agreements but most observers expect the Greek fiscal crisis to dominate the talks. The agreement puts German Chancellor Merkel in a difficult political position. Taxpayers in Germany are fiercely opposed to aiding Greece which has public debts of 12.7% of GDP-more than four times what is allowed by EU regulations.

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