EU, IMF agree 110 bln euro bailout for Greece

ATHENS/BRUSSELS (Reuters) – European finance  ministers triggered a record 110 billion euro ($147 billion)  bailout for debt-stricken Greece yesterday after Athens  committed itself to years of painful austerity.

After weeks of tough talk and procrastination due to fierce  public opposition to handouts for the Greeks, German Chancellor  Angela Merkel finally threw her full support behind the EU/IMF  package, vowing to fight for parliamentary approval by Friday.

Euro zone ministers, meeting in emergency session, approved  the three-year package of emergency loans and agreed the first  funds would be released in time for Athens to make a big debt  repayment to creditors on May 19.

In exchange for by far the largest bailout ever assembled  for a country, Prime Minister George Papandreou announced  further spending cuts and tax increases totalling 30 billion  euros over three years on top of tough measures already taken.

“It is an unprecedented support package for an unprecedented  effort by the Greek people,” a sombre Papandreou, wearing a dark  purple tie, the colour used for funerals in Greece, told a  televised cabinet meeting.

Merkel called the programme very ambitious and said she  would work to achieve swift parliamentary approval of Berlin’s  share — the biggest of any EU state at about 22 billion euros  out of 80 billion — of the rescue loans.

“I’m going to work for the Greece programme and its  passage,” she told reporters in Bonn, adding it was essential  for the stability of the euro single currency.

US President Barack Obama told Papandreou yesterday he  welcomes Greece’s “ambitious” reform programme, the White House  said. He also praised the “significant support” from the IMF and  Eurozone members.

Euro zone leaders will hold a special summit on Friday to  formally launch the rescue after obtaining parliamentary  approval where necessary. International Monetary Fund chief  Dominique Strauss-Kahn forecast the IMF board would approve its  30 billion euro contribution to the package this week.

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