Euro leaders to 'reinforce' budget pact after Greek bailout

BRUSSELS:

Euro leaders agreed on Friday to "reinforce" rules governing national budgets, after concluding a deal to offer debt-addled Greece 80 billion euros in crisis loans, an EU source said.

Greece's 15 partners in the shared currency "have approved the plan for loans, there's no problem there", the source said of the unprecedented 110-billion-euro (140-billion-dollar) pot, backed up by another 30 billion euros from the IMF.

The first of 30 billion euros of loans set aside for this year will be transferred before May 19, after the euro leaders meeting in Brussels endorsed an agreement reached between finance ministers at special talks on Sunday. Germany, France, Italy, Spain, the Netherlands, Portugal and Belgium had each more or less concluded the required parliamentary or legal manoeuvres before the summit began.

Going forward, the leaders agreed to "reinforce" the pact that limits public deficit and debt levels as a ratio of national output, which has taken on the appearance of a paper tiger with 13 out of 16 euro countries in breach of their commitments since the world's deepest post-war recession. However, the diplomatic source said precise measures -- which could include the suppression of voting rights or access to EU suport funding -- had still to be agreed.