Sarkozy, Merkel enter compromise to help debt-ridden Greece
I / Berlin March 24, 2010, 13:37 IST
As Germany becomes isolated in its opposition to the European Union's financial support to bail out debt-ridden Greece, French President Nicolas Sarkozy and German Chancellor Angela Merkel have agreed on a compromise at the two-day EU summit beginning Thursday in Brussels.
Sarkozy and Merkel have reached an understanding that the international monetary fund (IMF) should step in to rescue Greece in the event of an imminent bankruptcy, according to media reports.
The two leaders suggested that the IMF should provide Greece an emergency credit if the country reaches a situation where it no longer can get credits from the financial markets.
IMF's financial support should be given only as the last resort and it could be supplemented by voluntary bilateral credits from some of Greece's partners in the EU, Merkel said at a meeting of Christian Democratic Union (CDU) parliamentary faction in Berlin on Tuesday.
Sarkozy and Merkel plans to work together with the IMF on a compromise and to present their proposals to their EU partners before the summit meeting gets underway.
Even though Sarkozy is in favour of the EU giving financial support to help Greece out of the economic difficulties, he is keen to avoid any confrontation with Merkel. Until now, Sarkozy has opposed IMF's involvement in solving Greece's debt crisis and favoured a European solution.
Merkel reiterated at the party meeting her rejection of the EU's financial support for Greece in spite of appeals by the European Commission's President Jose Manuel Barroso and by EU foreign ministers for an agreement at the summit.
Barroso said in a newspaper interview that an urgent action by the EU leaders was needed before Greece's debt crisis undermines the economic stability of the euro zone and further weakens the common currency.
Barroso said he is confident that Merkel would support a rescue plan for Greece at the summit.
Merkel "is a committed European and I have no doubts that she will, if needed, be in favour of providing financial assistance to Greece," he said.