EU ministers agree on plan for Greece

Euro finance ministers have agreed to terms under which they would offer a multi-billion-euro rescue for Greece, whose debt crisis has presented risks for the European single currency. However, officials were tightlipped on details of the plans, which would only be pressed into action if European Union (EU) auditors fear Athens is losing the battle to control badly skewed finances. "We have clarified the modalities that will allow us to take co-ordinated action," said Luxembourg Prime Minister Jean-Claude Juncker, the head of the Eurogroup of 16 countries, after five hours of talks. The rescue plans would involve bilateral aid, not loan guarantees. They will require EU national leaders to push the button, although work on "technical details" to ensure they fulfil bloc treaty obligations that ban a straight bailout mean next week's Brussels summit may come too soon. Nonetheless, Juncker insisted that future gaps in Greek public finances could be plugged "rapidly" if deemed necessary. He underlined that the Greeks "have not asked for aid" and said the ministers "still don't think it will be necessary". A Eurogroup statement said the "objective would not be to provide financing at average euro area interest rates, but to safeguard financial stability in the euro area as a whole". It would aim to "provide strong incentives to return to markets as soon as possible", meaning high rates. Juncker added that the trigger for action would most likely be "the impression, in spite of the Greek Government's efforts, that markets do not react in an adequate manner". Diplomatic sources have spoken of €20 billion (Dh100.57bn) to €25bn being required. The Greek economy is groaning under €300bn of debt, and is looking to raise €54bn this year just to finance the debt – but is struggling to do so without paying premium interest rates. Economic and Monetary Affairs Commissioner Olli Rehn said the instruments envisaged were "consistent with treaty and national law" but that it was "not the time to refer publicly to the technical terms". Rehn reiterated the commission's belief, shared by the eurozone ministers, that Greece was on track to cut its annual budget deficit this year by four percentage points, from a huge 12.7 per cent of national output. Greek austerity measures have been met by a series of protests and strikes there in recent weeks. Prime Minister George Papandreou said last month that his country's borrowing needs were assured only until mid-March.