Eurozone agrees Greek rescue plan

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Eurozone agrees Greek rescue plan

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Leaders from the 16 eurozone countries have agreed to support Greece’s debt-laden economy -but only as a last resort.

The 22-billion-euro safety net includes IMF aid, but that money can only be accessed if Athens cannot raise funds from the markets.

The deal, which still needs approval from all 27 EU members, was welcomed by Greek Prime Minister George Papandreou.

“Europe and the European Union faced a great challenge and succeeded in facing up to it decisively. European leaders have protected the European Union and will protect our common currency,” he told reporters.

Under the package, eurozone nations will grant bilateral loans to Greece, some two-thirds of the total aid. The IMF will provide the rest.

Many countries were uneasy about IMF involvement, fearing it would undermine the eurozone’s credibility and weaken the single currency.

European Commission President Jose Manuel Barroso said: “I think this is the right decision at this time, to face what is an exceptional problem that we have in one of our member states, a member of the euro area, considering also the implications it could have for the stability of our economic and monetary union.”

The deal represents something of a victory for German Chancellor Angela Merkel, who insisted on tough conditions before helping Athens amid opposition to a Greek ‘bailout’ back home.