EU, IMF finalising rescue package for Greece

In a move intended to reassure the jittery financial markets, the European Commissioner for Monetary Affairs, Olli Rehn, on Thursday stressed the fact that the European Union and the International Monetary Fund (IMF) were aware of the need to move swiftly to help an overly indebted Greece.

Speaking to the press, the commissioner said the rescue package currently being thrashed out would give Greece "breathing space from the pressure of financial markets to decisively restore the sustainability of its public finances".

While avoiding any specifics related to the aid package under discussion, he said a deal was on the brink of being arrived at. Talks between the European Commission, the European Central Bank and the IMF are currently underway in Athens and the commissioner said he was "confident" they would be concluded in the "next days".

The euro rebounded from a one-year low on Thursday and Greece's borrowing costs eased following reports that the planned rescue package for Athens would be bigger than initially conceived. Greece's eurozone partners have promised to lend Athens ¤30 billion in the first year of a bailout, with at least an additional ¤15 billion coming from IMF.

However, in media reports across Europe the figures currently being bandied about are upwards of ¤100 billion in EU funds to be spread over three years. Rehn did not confirm these new figures.

He underlined that the loan to Athens would be to the benefits of all 16 member-states of the eurozone, a message related to the fact that some of the group's stronger economies, notably Germany, have been reluctant to bail out Greece, a country they perceive to have acted irresponsibly.

Moreover, developments in recent days have provoked fears of a Greek debt contagion spreading to Portugal, Spain and even Ireland.

"I want to underline that this exercise is done not only because of Greece, but for every euro area member state and their citizens to safeguard financial stability in Europe and globally," said Rehn.