Eurozone reaches agreement on Greek aid
Leaders come up with blueprint for providing emergency loans.
Leaders of the 16 nations in the eurozone tonight approved a blueprint for providing emergency loan aid to Greece.
All Greece’s counterparts in the eurozone have agreed to take part in providing bilateral loans, if needed, said José Socrates, prime minister of Portugal, who confirmed the accord.
“We have reached an agreement which answers the problem we have been faced with,” he said.
The leaders met on the margins of a European Union summit on Thursday evening (25 March). The summit has been overshadowed by the Greek debt crisis, which has rumbled on for three months and threatened to destabilise the euro currency.
In the run-up to the summit, Angela Merkel, Germany’s chancellor, had been holding out against EU aid for Greece, insisting that the International Monetary Fund (IMF) should be brought in. But the prospects of a deal improved markedly once Merkel and Nicolas Sarkozy, the president of France, presented their counterparts with a compromise proposal at the start of the summit.
The blueprint agreed is for a mix of bilateral loans from Greece’s 15 eurozone partner countries and from the IMF. But the “majority” of the financing would be provided by the eurozone states, according to an agreed statement.
Any aid given to Greece would need the unanimous backing of eurozone members – so Germany retains a veto – and would be “subject to strong conditionality”.
Socrates said Greece would face interest rates on the loans that would be “reasonable and not speculative”.
Fact File
National central bank – capital (%)
Nationale Bank van België /
Banque Nationale de Belgique 2.4256
Deutsche Bundesbank 18.9373
Central Bank and Financial Services Authority of Ireland 1.1107
Bank of Greece 1.9649
Banco de España 8.3040
Banque de France 14.2212
Banca d’Italia 12.4966
Central Bank of Cyprus 0.1369
Banque centrale du Luxembourg 0.1747
Central Bank of Malta 0.0632
De Nederlandsche Bank 3.9882
Oesterreichische Nationalbank 1.9417
Banco de Portugal 1.7504
Banka Slovenije 0.3288
Národná banka Slovenska 0.6934
Suomen Pankki – Finlands Bank 1.2539
TOTAL 69.7915
The eurozone leaders agreed they all had a “shared responsibility for the economic and financial stability” of the euro.
They reiterated “their willingness to take determined and co-ordinated action, if needed, to safeguard financial stability in the euro area as a whole”.
The leaders agreed to “promote a strong co-ordination” of their economic policies and agreed to bolster the “economic governance” of the EU.
They have asked Herman Van Rompuy, the president of the European Council, the European Commission and the European Central Bank to come up with proposals to strengthen their economic co-operation by the end of the year.
“The current situation demonstrates the need to strengthen and complement the existing framework to ensure fiscal sustainability in the eurozone and enhance its capacity to act in times of crises,” said the Eurogroup statement.