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Greek debt crisis

May 7, 2010

The French parliament has approved the country's contribution to a European Union aid deal for debt-laden Greece. The vote comes ahead of a parliamentary vote in Berlin on Germany's payment into the bailout fund.

From right to left, the Greek, National Bank of Greece and European Union flags wave at the headquarters of the National Bank of Greece
The EU has come to Greece's rescueImage: AP

France's parliament has approved an aid package of up to 16.8 billion euros ($21.2 billion) for eurozone partner Greece. The funds are to be paid out over the next three years as part of an EU financial aid deal for Athens.

As much as 3.9 billion euros of the French contribution is to be made available this year. The aid deal passed the parliamentary vote with broad backing from both the ruling center-right party of President Nicolas Sarkozy and the opposition Socialists.

Speaking on Canal Plus television, Finance Minister Christine Lagarde reiterated that "Greece is part of the eurozone, so we are all together in the same boat."

Together with the International Monetary Fund, the EU has offered Greece 110 billion euros over the next three years to help stabilize the country's economy and alleviate its huge mound of debt.

As a precondition to the deal, the Greek government has pushed through a tough austerity program, which includes spending cuts totaling 30 billion euros.

The program has led to widespread demonstrations and strikes across Greece. Three people died in Athens on Wednesday after rioters set fire to a bank.

German parliament to vote Friday

German Chancellor Angela Merkel
Merkel has had to sell Germany's contribution to GermansImage: AP

Meanwhile, parliamentarians in Germany, the country paying the most into the aid package, are to vote on their country's contribution on Friday. The legislation allowing Berlin's 22.4-billion-euro pledge is currently being debated in the lower house, the Bundestag, ahead of a vote in the upper house, the Bundesrat.

The legislation is expected to pass as the coalition government of Chancellor Angela Merkel enjoys a strong majority in parliament. Germany's contribution has been deeply unpopular within the country, and Merkel has had to work hard to convince ordinary Germans that Greek stability was important for European stability.

Later Friday, Merkel is to meet with other eurozone leaders in Brussels in a bid to finalize the Greek rescue deal, and address the longer-term future of the European single currency.


Editor: Martin Kuebler