France and Germany make deal on Greek bailout

 
City A.M. Reporter
Germany and France have reached a common position on a second bailout of Greece in their effort to prevent the country's debt crisis from spreading through Europe, officials said on Thursday.

The accord came after seven hours of talks late into Wednesday night between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Berlin, sources in both governments said.

Details of the common position were not revealed. European Central Bank President Jean-Claude Trichet joined Merkel and Sarkozy for part of their talks.

The accord between the two most powerful states in the euro zone will now be presented to a crisis summit in Brussels later today of all 17 leaders of the bloc, who are trying to prevent fears of a Greek debt default from poisoning access to the bond market for bigger states such as Italy and Spain.

The new bailout would supplement a 110 billion euro (£96bn) rescue plan for Greece launched in May last year. It is expected to include fresh emergency loans to Athens from euro zone governments and the International Monetary Fund, and possibly a range of other measures.

Worried about the impact on financial markets and wary of angering their own taxpayers, euro zone governments have struggled for several weeks to agree on major aspects of the plan, especially a contribution by private sector investors.