The German Chancellor, Ms Angela Merkel, and the French President, Mr Nicolas Sarkozy, have sorted out their dispute over involving private creditors in a second financial rescue of debt-laden Greece, clearing the way for a long-awaited deal at an emergency summit of Euro zone leaders in Brussels today.

The agreement between Ms Merkel and Mr Sarkozy was struck at a surprise meeting in Berlin on Wednesday night during discussions lasting more than six hours in the chancellery after several weeks of wrangling between Euro zone partners over the terms of a new bailout package for Greece.

They were unexpectedly joined for more than one hour by the European Central Bank President, Mr Jean-Claude Trichet, a government spokesman said.

Their decisions were taken in consultation with Mr Herman Van Rompuy, President of the European Council, who hosts the summit.

The meeting between Ms Merkel and Mr Sarkozy was hurriedly arranged during a telephone conversation on Tuesday and the leaders of Europe’s two largest economies apparently wanted to demonstrate once again that they hold the key to an agreement on a major issue affecting the future of Europe.

The Euro zone leaders have been under pressure in the past weeks to reach a speedy agreement on a second rescue package of about €120 billion to send a strong message to increasingly nervous financial markets that they will act decisively to deal with the Greek crisis and safeguard the stability of their common currency.

A second rescue package over a year after Greece received €110 billion became necessary to avert the Greek crisis spilling over to larger Euro zone economies such as Spain and Italy.

Related Topics