The European Union is working on reaching an agreement on a bail-out deal for Greece, media reports said Saturday. Euro leaders are set to meet in Brussels on Monday to finalize the proposal.
The multi-billion euro rescue package would provide loans and guarantees for Greece if it sought help for financing its deficit, reports said citing EU officials. The Greek crisis had hurt the 16-nation currency, euro. Greece has not asked for financial help thus far.
Currently, Greece's debt is at a staggering 300 billion euros. With the deficit equal to 12.7% of the gross domestic product, Prime Minister George Papandreou's government has been under immense pressure from the EU to take immediate steps to address the crisis, as all member states are required to keep their budget deficits to 3% of GDP or under.
The Greek parliament approved additional 4.8 billion euros austerity measures on March 5. In January, the government had announced a stability program to help the country in reducing its budget gap to 2.8% of GDP in 2012. However, Greek worker unions are opposing austerity measures and have already held several nation-wide strikes in protest. The downgrading of its credit ratings has made it more difficult and expensive for Greece to borrow money.
Citing senior sources in Brussels, The Guardian newspaper reported on Friday that Berlin had agreed to the bailout agreement despite huge resistance in Germany. The euro rulebook may also be rewritten to enforce greater fiscal discipline among members, the U.K. daily said. The aid could total 25 billion euros, according to the newspaper, although it is estimated that Greece could require up to 55 billion euros by the end of the year.
The rules governing the euro prohibit a bail-out for a member country on the brink of insolvency. Opposition to the Greece rescue has been strong in Germany, the biggest economy in the currency bloc. The rescue plan is reportedly designed to avoid a possible challenge in the German supreme court.
The bail-out will be seen as a last resort and it is hoped that the funding will not be actually needed. According to the BBC, Germany and France are said to be the main sponsors of the package, while other Euro members and the U.K. will not contribute.
However, the Financial Times reported that disagreements still remained over the size of a possible bail-out. Further, the newspaper said citing an official that Germany and the Netherlands are yet to agree the rescue plan.
The German Finance Ministry denied agreeing on any new deal, Bloomberg newsagency reported. Bloomberg also reported that Euro leaders are mulling whether any Greek bailout should be funded by EU bonds guaranteed by euro region governments. Any EU bond sale must be agreed upon by all 27 members, the newsagency reported citing sources.
Olli Rehn, the European Commissioner for economic and monetary affairs, is also expected to advance a discussion about ways to tighten the stability and growth pact that governs member states' fiscal limits, reports said. Rehn plans to publish proposals in April to improve surveillance of member states' finances through Eurostat, the EU's statistics agency. The commission is expected to make use of the powers conferred by the recently enacted Lisbon treaty, The Guardian report said.
Eurozone ministers are set to meet on Monday. The entire EU will reportedly meet the next day.
Meanwhile, German finance minister Wolfgang Schauble, who kicked off a debate last week over the creation of a European Monetary Fund, will not take part in the upcoming meetings in Brussels on Monday and Tuesday as he is currently in hospital, The Guardian report said. Many eyebrows were raised when Schaeuble wrote in an opinion piece in the FT on Friday that any Eurozone member country that fails to consolidate its budget or to restore competitiveness should be expelled from the currency bloc.
"A country whose finances are in disarray must not be allowed to participate in decisions regarding the finances of another euro member," Schaeuble wrote. "Should a Eurozone member ultimately find itself unable to consolidate its budgets or restore its competitiveness, this country should, as a last resort, exit the monetary union while being able to remain a member of the EU."
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.