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Eurozone states agree Greece rescue package

EU summit agree "last-resort" deal, made up of bilateral loans from member states, and IMF money.

All 16 eurozone countries have agreed on a "last-resort" rescue package for debt-stricken Greece, which will include IMF money.

If put into action, the deal, brokered by Germany and France at a summit in Brussels, will total up to €22bn (£20bn) but it will only be used if market lending to Greece dries up.

Two-thirds of this funding would come from co-ordinated bilateral loans from eurozone nations. It would require unanimous agreement from all 16 states to release loans.

Greek prime minister George Papandreou said that it was "very satisfactory".

Herman Van Rompuy, president of the European Council, said that the deal was significant "not just for Greece, but for the stability of the eurozone".

The deal still needs to be backed by the other 11 member states of the European Union.

Eurozone states hope that this deal will be enough to safeguard the euro against market concerns. The currency hit a 10-year low against the dollar on Wednesday.

The German chancellor, Angela Merkel, has been reluctant to offer Greece a bailout, and insisted on IMF involvement, which was strongly opposed by Nicolas Sarkozy and others.

She said that she would press for the EU to change its treaties to allow sanctions to come into force is a eurozone country defaults on its debt.

In an attempt to curb its deficit, Greece has frozen public sector wages and pension reforms, and increased fuel tax. It is expected that the crisis will come to a head in April or May, when Athens has to refinance €23bn (£20bn) of debt.

The Greek government has not yet requested financial support.