The 16 countries that share the euro currency have agreed to back a Franco-German plan to offer Greece loans in combination with the IMF, a diplomatic source told AFP.
‘There is a deal,’ the source said after a meeting of eurozone leaders on the sidelines of a full European Union summit.
The unprecedented tie-up, which a French government source said would be two-thirds funded by euro zone contributions and one third by the IMF, will only be activated as a ‘last resort’ and will involve unsubsidised interest rates, according to a text released by Berlin and Paris.
For loans to be activated, all euro zone members must agree although a top European official admitted contributions will effectively be voluntary.
No sums have been advanced, but diplomats have consistently spoken over recent weeks of figures upwards of €20bn.
Earlier, the Franco-German deal was confirmed by a German government source.
Head-to-head talks between the pair have ‘proved productive,’ said a French presidency source, who added that the agreement laid out ‘very precise conditions’ under which eurozone countries ‘could be led to intervene.’
The text envisages ‘a European framework constituted of coordinated bilateral loans which member states would be drawn to contribute to,’ the source said, with a complement of ‘International Monetary Fund loans.’
