EU bailout deal almost done
The possibility of the eurozone putting together a multibillion-euro bailout package for Greece grew all the more likely yesterday as it emerged that the details of such a scheme are due to be finalized on Monday. Sources in Brussels told foreign media that the members of the 16-state eurozone have agreed to help Greece through coordinated bilateral contributions in the form of loans or loan guarantees if Greece needs them. The European Commission would coordinate such action. Another option, according to sources, would be for the Commission itself to borrow money on the open market and extend loans to Greece that would be guaranteed by European Union states. The French daily newspaper Le Monde cites an internal Commission document which deems the first option to be easier in the short term but the second one to be better in the long term. Le Monde suggests the aid will be 20 to 25 billion euros, which one Brussels source confirmed last night to Agence France-Presse. «As soon as governments say they will help Greece if necessary, technical work takes place on different means through which to provide that support,» another diplomatic source told AFP. Pia Ahrenkilde-Hansen, a spokesperson for Commission President Jose Manuel Barroso, said that some technical work is under way but that everything else is «speculation.» Greece has not asked for any financial aid but has argued that some kind of mechanism should be in place, not only in case it needs it but also to deter speculators and allow Athens to borrow at a similar rate to other eurozone countries. It is expected that the details of the bailout package will be finalized at a Eurogroup meeting on Monday, when proposals for imposing greater fiscal discipline among members will also be discussed. Meanwhile, Premier George Papandreou, German Chancellor Angela Merkel, French President Nicolas Sarkozy and Luxembourg Prime Minister Jean-Claude Juncker have written to Barroso asking for an investigation into the role of speculators trading in credit default swaps linked to government bonds. The four leaders are calling for tighter regulation of such derivatives.