Germany and France have agreed to back International Monetary Fund aid for Greece.

Germany, France Back IMF Aid to Greece, Official Says (update)
By Brian Parkin
March 23 (Bloomberg) -- Germany and France have agreed to back International Monetary Fund aid for Greece, a German Finance Ministry official said, signaling a joint position after weeks of dispute over how to resolve the Greek crisis.


Germany and France, the euro region’s two biggest economies, are now pulling together before a two-day EU summit in Brussels beginning March 25, the official said on condition of anonymity. Greece has pressed the EU to make specific commitments on aid to help lower its borrowing costs.
Conflicting signals before the EU summit triggered three days of declines in Greek debt that drove the yield on 10-year bonds to 6.44 percent yesterday, the highest since Feb 25.
“The German government is on the right track in pursuing close cooperation with France to help Greece help itself,” Volker Wissing, chairman of parliament’s Finance Committee, told reporters in Berlin.
Earlier today, another German official ruled out standalone EU aid without a substantial IMF contribution. Germany also insists on rewriting EU treaties to stiffen sanctions against countries that flout deficit limits, the official said on condition of anonymity.
Franck Louvrier, a spokesman for French President Nicolas Sarkozy, wasn’t immediately available to comment, while a German government spokesman declined to comment.
The surge in financing costs led Prime Minister George Papandreou to say on March 19 that Greece, which needs to sell about 10 billion euros ($14 billion) of bonds in coming weeks, is one step away from not being able to borrow.
Greek bonds rallied today. The 10-year yield dropped to 6.32 percent, still more than double the yield on Germany’s 10- year notes.

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