Euro zone finance ministers have unanimously approved a detailed €30 billion emergency aid mechanism for debt-plagued Greece on this afternoon but stressed it had not requested that the plan be activated now.
In a rare weekend telephone conference, ministers from the 16 nations that share the single European currency backed a plan for Athens to borrow from euro zone governments and the IMF at well below current market rates if market funding dries up.
Greece would receive €30 billion in the first year from all euro zone countries in bilateral loans coordinated by the European Commission and paid via the European Central Bank, the head of the Eurogroup of finance ministers said.
"If the mechanism had to be activated, it would not be a violation of the no-bailout clause (in the European Union treaty) since the loans are repayable and contain no element of subsidy," Eurogroup chairman Jean-Claude Juncker told a news conference in Brussels after the meeting.
European Economic and Monetary Affairs Commissioner Olli Rehn said the euro zone loans would carry an interest rate of about 5 per cent -- well below current market rates of over 7 per cent.
The size of the International Monetary Fund's contribution to any package was not disclosed but it would come on top of the euro zone amount. Euro zone countries would pay proportionately to their share in the ECB's capital. Talks on coordination with the IMF will begin on Monday, Mr Rehn said.
If the plan is activated, Ireland would be liable to loan the Greeks €450m. The Minister for Finance Brian Lenihan said the decision was "first and foremost about safeguarding financial stability" in the euro area.
"The costs of all countries participating, including Ireland, in this facility would be fully covered. Ireland's participation would require national legislation."