Greece aid 'only way' to ensure euro stability: Merkel

3rd May 2010, Comments 0 comments

German Chancellor Angela Merkel hailed Sunday Greece's "very ambitious" austerity plan Sunday and said that a bailout was the only way to ensure the stability of the euro.

"I think that this is a very ambitious programme," Merkel told reporters in Bonn, western Germany. "I think that (the aid) is the only way to ensure the stability of the euro."

Greece announced earlier Sunday that it has struck a deal with the European Union and the International Monetary Fund for an emergency bailout to prevent it defaulting on its debt, in return for deep spending cuts.

EU-IMF loans to debt-laden Greece are set to total around 110 billion euros (146 billion dollars) over three years, according to a draft deal to be endorsed by eurozone finance ministers on Sunday in Brussels, a diplomatic source said.

Merkel said she was aware that Greece's planned cuts, which are set to come up against strong union opposition, "require a high degree of political tenacity."

Berlin has come under pressure for dragging its feet over Greece, but with Germany set to be the biggest contributor among European countries to a bailout, voters are uneasy and Merkel has had to tread carefully.

Merkel's government hopes that new legislation needed before any loans can be disbursed will become law by Friday. Her cabinet was due to prepare a bill on Monday which will get its first reading in parliament on Wednesday.

Earlier, German Economy Minister Rainer Bruederle said Greece had to implement its new austerity programme "quickly" and "to the letter."

© 2010 AFP

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