Fri, March 26, 2010
World > Europe > Greek debt crisis

Eurozone leaders endorse standby aid plan for Greece

2010-03-26 02:31:46 GMT2010-03-26 10:31:46 (Beijing Time)  Xinhua English

Greek Prime Minister George Papandreou speaks to media upon his arrival to a Sociallist Party Group (PSE) meeting prior to the European summit in Brussels, capital of Belgium, March 25, 2010. Papandreou on Thursday urged European Union leaders to stabilize the euro while the cash-strapped country determines to continue a program to cut its ballooning budget deficit. (Xinhua/Thierry Monasse)

EU leaders pose for a familly photo on the sidelines of the European Summit in Brussels, capital of Belgium, March 25, 2010. Greece agreed on Thursday evening to a bailout plan hammered out by German and French leaders, paving way for an endorsement by eurozone countries, sources said. It was now up to the European Union (EU) president Herman Van Rompuy to call a summit among leaders of eurozone countries to discuss and formally adopt the plan, which could happen very soon, the sources said. (Xinhua/Thierry Monasse)

Maltese Prime Minister Lawrence Gonzi (L) talks with German Chancellor Angela Merkel prior to a family photo session on the sidelines of the European Summit in Brussels, capital of Belgium, March 25, 2010. (Xinhua/Thierry Monasse)

Greek Prime Minister George Papandreou (R) shakes hands with Belgian Socialist Party chairman Elio Di Rupo at a Socialist Party Group (PSE) meeting prior to the European summit in Brussels, capital of Belgium, March 25, 2010. (Xinhua/Thierry Monasse)

President of the European Commission Jose Manuel Barroso (L Front) and French President Nicolas Sarkozy (R Front) pose during a family photo session on the sidelines of the European Summit in Brussels, capital of Belgium, March 25, 2010. (Xinhua/Thierry Monasse)

BRUSSELS, March 25 (Xinhua) -- Eurozone leaders agreed on a standby aid plan for debt-laden Greece late on Thursday, which combines bilateral loans from eurozone members and contribution from the International Monetary Fund (IMF).

"As part of a package involving substantial International Monetary Fund financing and a majority of European financing, euro area member states, are ready to contribute to coordinated bilateral loans," said a statement released by the leaders.

According to the statement, Greece could only draw on the aid fund as a last resort and under strict conditions.

"This mechanism, complementing International Monetary Fund financing, has to be considered ultima ratio, meaning in particular that market financing is insufficient," the statement said.

"We expect euro-member states to participate on the basis of their respective ECB capital key," it added.

The eurozone leaders said, "the objective of this mechanism will not be to provide financing at average euro area interest rates, but to set incentives to return to market financing as soon as possible by risk adequate pricing."

They further stressed that since the Greek government has not requested any financial support, "no decision has been taken to activate the below mentioned mechanism."

Greek Prime Minister George Papandreou hailed the deal as "very satisfactory" at a press conference held after the meeting of eurozone leaders.

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