After finally ironing out differences that had threatened to derail European Union assistance to Greece, and destabilize the eurozone, German Chancellor Angela Merkel and French President Nicolas Sarkozy have come up with a plan to help Greece.

The two leaders worked out the plan in face-to-face talks immediately before an EU summit was set to begin on Thursday evening in Brussels. The agreement would allow eurozone countries to offer Greece bilateral loans. The International Monetary Fund would also be involved, providing additional support in exchange for fiscal reforms in Athens.

Sarkozy and Merkel are set to present the plan first to EU president Herman Van Rompuy, and then to eurozone and EU leaders.

Two different approaches

Germany and France have come to represent two different views on how to deal with Greece, whose growing debts have raised concerns for the wider eurozone. Merkel has pushed for IMF aid while Sarkozy wants to see the EU support Greece.

"Europe cannot face this crisis alone," Merkel said in an address to the German parliament earlier on Thursday.

Greece, whose credit rating has been downgraded by all the major ratings agencies, had asked for the promise of a eurozone loan - rather than a loan itself - to convince other lenders to lower their charges for loans.

hf/AFP/dpa/Reuters
Editor: Ben Knight