EU leaders nod to aid deal for Greece
By Marcin Grajewski and Jan Strupczewski |
February 12, 2010, Friday
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Print Edition
Print Edition
EUROPEAN leaders have reached a deal to provide aid to Greece, European Union President Herman Van Rompuy said yesterday, in an unprecedented move to stave off a broader crisis in the 16-nation bloc that shares the euro.
"There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders," Van Rompuy told reporters gathered at an EU leaders' summit.
The agreement was forged in talks between Van Rompuy, European Commission President Jose Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and Greek Prime Minister George Papandreou.
Polish Prime Minister Donald Tusk told reporters earlier that the aid, which would amount to the first bailout of a eurozone member since the currency was created 11 years ago, was likely to be loans.
"It could be voluntary loans from member states. That seems to be the best option," Tusk said.
A Spanish source told Reuters that details of the aid would be worked out by Tuesday, when EU finance ministers will hold a meeting.
"The general idea is to have broad European assistance with a tighter focus of assistance by eurozone countries," the source said, requesting anonymity. The commission would have a supervisory role over the aid deal.
European leaders are keen to prevent Greece's woes from spreading to other highly indebted eurozone members, such as Portugal or Spain, plunging the currency area into a bigger crisis that could reverberate around the globe.
But until this week, they have avoided speaking openly about the aid, fearful that might ease pressure on the government in Athens to enact tough austerity measures to trim a deficit that soared to 12.7 percent of gross domestic product last year - over four times EU limits.
Athens needs to borrow 53 billion euros (US$75 billion) this year to cover its deficit and refinance debts.
"There is an agreement on the Greek situation. We will communicate now the agreement to the other leaders," Van Rompuy told reporters gathered at an EU leaders' summit.
The agreement was forged in talks between Van Rompuy, European Commission President Jose Manuel Barroso, French President Nicolas Sarkozy, German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and Greek Prime Minister George Papandreou.
Polish Prime Minister Donald Tusk told reporters earlier that the aid, which would amount to the first bailout of a eurozone member since the currency was created 11 years ago, was likely to be loans.
"It could be voluntary loans from member states. That seems to be the best option," Tusk said.
A Spanish source told Reuters that details of the aid would be worked out by Tuesday, when EU finance ministers will hold a meeting.
"The general idea is to have broad European assistance with a tighter focus of assistance by eurozone countries," the source said, requesting anonymity. The commission would have a supervisory role over the aid deal.
European leaders are keen to prevent Greece's woes from spreading to other highly indebted eurozone members, such as Portugal or Spain, plunging the currency area into a bigger crisis that could reverberate around the globe.
But until this week, they have avoided speaking openly about the aid, fearful that might ease pressure on the government in Athens to enact tough austerity measures to trim a deficit that soared to 12.7 percent of gross domestic product last year - over four times EU limits.
Athens needs to borrow 53 billion euros (US$75 billion) this year to cover its deficit and refinance debts.
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