European Union leaders have tonight called on Greece to "urgently" enact deficit-cutting measures and vowed to do what is needed to meet the country's financing needs in July.
In a statement issued after a summit in Brussels, EU leaders welcomed Greece's "strong commitment" to containing debt and deficit.
They also endorsed the voluntary participation of investors in a rescue plan for Greece, which is seeking to avert a default on its debt next month by securing the release of a €12 billion EU-IMF bailout loan.
Greek prime minister George Papandreou is under huge international pressure to secure parliamentary support next week for €28 billion in cutbacks and tax increases and a €50 billion privatisation plan required to control the country's debt crisis.
Speaking after the summit, Mr Papandreou said he had received the support of the country's European Union partners. "This is not only a green light but also a positive sign for the future of Greece," he said.
Greece earlier won the consent of international lenders for its five-year austerity plan.
Finance minister Evangelos Venizelos is said to have clinched agreement with EU and IMF inspectors on extra tax increases and spending cuts to plug the €3.8 billion funding gap after a day of wrangling.
Greek government spokesman Elias Mossialos, accompanying Mr Papandreou, confirmed the talks had been completed and the legislation would be put to parliament next week. The euro rebounded against the dollar and US stocks pared losses on reports of the agreement.
Entering the summit, Mr Papandreou said Greece was "strongly committed" to carrying out its budget-cutting program.
"This is a fight for the Greek people. This is a fight for Greece, for our country," he said on arrival to the summit. "But it's also a fight for a common European currency and a common Europe."
Taoiseach Enda Kenny is also attending the summit. He met members of the European People's Party, of which Fine Gael is a member, beforehand.
Asked by reporters did he have any expectations of success on the issue of the interest rate on Ireland's EU-IMF bailout at the Council meeting, Mr Kenny replied: “To be honest with you, I don’t expect so.”
A Government spokesman said the summit, which continues tomorrow, would allow European leaders to discuss progress on economic issues over the last three months.
“The meeting will consider the latest developments on economic issues and the euro, and take stock of the progress made on a range of economic governance issues agreed in March,” the spokesman said.
France has downplayed down the prospect of a deal to cut the cost of the State's bailout, however, making a breakthrough unlikely even as Mr Kenny said he might raise the matter with French president Nicolas Sarkozy at an EU summit.
Mr Kenny has been criticised by the Opposition for failing to meet Mr Sarkozy about his opposition to a cut in Ireland’s loan interest rate more than three months after it had been agreed in principle.
Earlier, Minister for Finance Michael Noonan said he was considering getting T-shirts printed that said "Ireland is not Greece" in an attempt to distance the State from other debt-burdened nations.
"We won't give them away, we'll sell them," Mr Noonan said at an event in Dublin today.
He also said Ireland is "on track" with budgetary measures under its EU-IMF bailout agreement.
Agencies
