28 Mar 2010

France, Germany reach deal on Greece's debts

9:20 am on 28 March 2010

France and Germany have reached a deal on a financing plan for debt-ridden Greece, that will involve EU member states and the International Monetary Fund (IMF).

Officials in Brussels say the package, which is yet to be agreed by other eurozone states, is worth 23 billion euros.

A French official said the deal, agreed in Brussels shortly before an EU summit, opened the way for bilateral loans to be made available under a system mainly involving the euro zone but also using money from the Washington-based IMF.

The money would be used only if there were serious difficulties and there was no other solution, the official said.

Greece has not asked for money to help service its debts but has said it favours a standby package being made available to reassure investors.

The euro hit a 10-month low against the dollar on Wednesday after a credit downgrade for Portugal, which is also struggling with heavy debts, the BBC says.