EU Plans New Greek Bailout

The New York Times reports:

Europe’s leaders prepared the way for a second, large, bailout of Greece on Friday, pledging not to abandon the debt-laden nation to a default providing it votes a tough package of austerity measures through its Parliament next week.

“We have agreed that there will be a new program for Greece,” Chancellor Angela Merkel of Germany told reporters at the end of a two-day summit meeting in Brussels. “This is an important decision that says once again we will do everything to stabilize the euro overall.”

The comments came a day after Greece agreed with international creditors to more austerity measures as part of revised plans for 2011-15 designed to plug a gap in its future financing.

If the Greek Parliament approves this proposal next week, the E.U. and the International Monetary Fund will release a €12 billion, or $17 billion, tranche of emergency aid, and then put together a second rescue.

The shape and size of the new bailout could become clear on July 3 at a meeting of euro zone finance ministers in Brussels.