France and Germany agree Greek debt pact

21 July 2011

A pact has been made between France and Germany with regards to a strategy aimed at solving the debt crisis in Greece.

German chancellor Angela Merkel and French president Nicolas Sarkozy are to relay a joint position when they attend a summit in Brussels aimed at preventing contagion in European bond markets, Bloomberg reports.

The two countries came to an agreement following a seven-hour meeting in Berlin, which was also attended by president of the European Central Bank Jean-Claude Trichet.

European Union (EU) officials are to discuss both the likelihood of a second bailout for Greece and the ways in which the debt problem can be prevented from reaching Spain and Italy.

Options regarding Greek assistance include using a bank tax to finance a rescue package and allowing a rollover of the country's arrears.

Bloomberg recently reported that investors are yet to be convinced that EU leaders will be able to arrive at a suitable and workable plan of action for battling the Greek debt crisis.

By Tony Aynsley

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