Briton dies in Greece 'stabbing'

13 July 2011 Last updated at 15:54 GMT A British man has died after being attacked by two taxi drivers on an island in Greece, local police said.

Robert Sebbage, thought to be 19 and from Tadley, Hampshire, was reportedly stabbed on the island of Zakynthos.

Local police said a 21-year-old taxi driver had been charged after a group of Britons were attacked, leaving one dead and four injured - one seriously.

Two Greek taxi drivers, aged 21 and 25, are charged with murder and complicity to commit murder respectively.

They are expected to appear in court later.

The attack is thought to have happened in the early hours of Wednesday at the popular Laganas resort on the island, also known as Zante, where the 19-year-old had been with a group of friends believed to be in their 20s.

Witnesses told the Reuters news agency an argument had broken out after a group of tourists shone laser pens at two local men at a restaurant.

Popular holiday destination

A local police spokesman said two Greek taxi drivers had been "involved in an argument" with a group of foreign nationals, "resulting in a physical confrontation".

He said: "A 21-year-old taxi driver attacked and injured five British nationals, one of whom suffered fatal injuries."

The dead man's name has not been released.

The Foreign Office said it was in contact with the families of those involved and is providing consular assistance.

"We can confirm that five British nationals were involved in a serious incident in Zakynthos, Greece," said a spokeswoman.

"Sadly, this resulted in the death of one British national and the hospitalisation of four others, one in a serious condition."

Zakynthos, a western Greek island, is a popular destination for Britons, with direct charter flight links to several cities.

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Banking chief positive on Greece

6 July 2011 Last updated at 16:41 GMT Charles Dallara: "In spite of all the challenges, all the difficulties, the seeds of success are being planted."

The chairman of the latest rescue talks on Greece says he is positive a way of supporting Greece will be found.

International monetary authorities and eurozone governments are trying to build a new rescue package for Greece.

For the first time they want private lenders to contribute and lenders have been meeting in Paris to work out how they can contribute to a new bail-out.

The comments came from Charles Dallara, the head of the lobby group that is chairing the meeting.

Mr Dallara, from the Institute of International Finance (IIF), acknowledged that the solution was not an easy one but said he was "very positive" about the outcome.

He told the BBC's Christian Fraser: "I actually believe, in spite of all the challenges, all the difficulties, that the seeds of success are being planted."

The talks are the first in a series of meetings aimed to find a way of giving Greece a second rescue package, thought to be worth a similar amount to the first one of 112bn euros (?100bn).

French banks, which are among the biggest lenders to Greece and therefore have the most to lose from any default, have proposed giving the country softer repayment terms.

Agency problems

Not all banks are thought to be as willing, but Mr Dallara said there was hope: "The private financial community has signalled quite clearly in the last week its intent and willingness to explore voluntary options.

"Everyone recognises it is in the interests of all stakeholders to seek a voluntary solution."

One problem lies with the credit rating agencies, who measure the health of borrowers, including countries.

Their opinion affects the terms on which a borrower can lend.

On Monday, Standard & Poor's warned that current proposals for restructuring Greece's debt would effectively constitute a default, something that would trigger write downs of bank assets and potentially cause mayhem in global financial markets.

Mr Dallara said that he thought a way could be found to satisfy the ratings agencies.

The IIF represents insurers and other financial firms as well as banks including BNP Paribas, Deutsche Bank, HSBC and Societe Generale.

It is playing an informal role co-ordinating international banks to reach consensus about private-sector involvement in any bail-out.

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Greece arrests Gaza ship captain

3 July 2011 Last updated at 01:42 GMT The Audacity of Hope was prevented from setting sail from the port of Perama on Friday night The Greek authorities have arrested the captain of a boat that was due to carry activists to the Gaza Strip.

John Klusmire, a US citizen, is being held in custody at police headquarters in the port of Piraeus, near Athens.

He faces charges of trying to leave port without permission and of endangering the lives of passengers.

His vessel, the Audacity of Hope, was part of a flotilla planning to take humanitarian aid to Gaza in order to challenge the Israeli blockade.

It was prevented from setting sail from the port of Perama on Friday night by the Greek coastguard, in accordance with a ban announced the same day which the Greek government said was intended to protect activists.

The Audacity of Hope, which is currently moored at a naval base, was carrying 36 passengers, four crew and about 10 members of the media.

A spokeswoman for the boat, Jane Hirschmann, told the Associated Press that the conditions of Mr Klusmire's detention were "terrible".

"There is no bed. He is sitting on a bench," she added.

'Unsustainable conditions'

The Israeli government has meanwhile denied claims it sabotaged two ships docked in Turkey and Greece which were to join the flotilla.

Israeli Foreign Ministry spokesman Yigal Palmor dismissed the accusations as "ridiculous," calling them "sad conspiracy theories".

The Turkish authorities have also said there is no evidence that the Irish vessel docked at the Aegean port of Gocek was sabotaged.

Nine activists on a Turkish aid ship were killed last year in a raid by Israeli commandos as it tried to reach Gaza.

Israel and Egypt have imposed a blockade on the coastal territory since the Islamist militant group, Hamas, seized control of it in 2007.

The Quartet of Middle East peace mediators - the UN, US, EU and Russia - said on Saturday that it remained concerned about the unsustainable conditions facing Palestinian civilians in Gaza, but noted "a marked increase in the range and scope of goods and materials" allowed in.

"The Quartet strongly urges all those wishing to deliver goods to the people of Gaza to do so through established channels so that their cargo can be inspected and transferred via established land crossings."

"The Quartet regrets the injury and deaths caused by the 2010 flotilla, urges restraint and calls on all governments concerned to use their influence to discourage additional flotillas, which risk the safety of their participants and carry the potential for escalation," it added.

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Eurozone releases more Greece aid

2 July 2011 Last updated at 20:42 GMT There have been violent protests against the austerity measures in Greece Eurozone finance ministers have approved the latest tranche of emergency help for the Greek economy.

They will release 12bn euros (?10.4bn, $17.4bn) in the next two weeks to help Greece meet spending commitments and avoid defaulting on its huge debts.

Earlier this week, the Greek parliament passed tough austerity measures demanded by the European Union and International Monetary Fund.

MPs backed the measures despite angry protests on the streets of Athens.

The EU and IMF have already agreed to provide Greece with a total of 110bn euros in emergency loans, with eurozone finance ministers discussing the details of a second bail-out designed to help Greece pay its debts until the end of 2014.

Greek Finance Minister Evangelos Venizelos welcomed the eurozone move, saying it "strengthened the country's international credibility".

He added: "What is crucial now is the timely and effective implementation of the decisions taken in parliament, so we can gradually emerge from the crisis in the interest of national economy and the Greek citizens."

'Breathtaking'

Earlier on Saturday, Polish Finance Minister Jacek Rostowski criticised Europe's handling of the Greek debt crisis.

He suggested that too much emphasis had been put on austerity measures and not enough on growth.

And he accused opposition parties in some unnamed eurozone countries of showing "breathtaking short-sightedness" in their opposition to support for Greece.

His comments come after Poland took over the six-month presidency of the European Union (EU) on Friday.

Mr Rostowski will now chair meetings of EU finance ministers, and hopes to join talks among eurozone finance ministers - even though Poland has not adopted the euro as its currency.

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German lenders 'join Greece plan'

30 June 2011 Last updated at 14:43 GMT There have been violent protests against the austerity measures in Greece German lenders and insurers have agreed to participate in a plan to continue lending to Greece, according to German finance minister Wolfgang Schaeuble.

He was speaking after a private meeting of the country's main banks.

Mr Schaeuble said German institutions would contribute 3.2bn euros ($4.6bn, ?2.9bn) to the plan, details of which have yet to be finalised.

It comes after French banks agreed to relend about half of Greek debts they own coming due by 2014.

"I'm happy that the representatives of the financial sector have said they are ready to participate in a European package for a second aid programme for Greece," said Mr Schaeuble.

He added that he was confident that a solution would be reached by the time of a planned meeting of eurozone finance ministers in Brussels on Sunday, but that further work was needed on the plan over the coming weeks.

Bad banks

The chief executive of Deutsche Bank, Josef Ackermann, commented that the French plan could form a "basis" for a deal.

"We are of the opinion that Greece must be helped... we are ready to do so," he added.

The French plan is designed to make Greece's debtload more manageable in a way that would not be deemed a formal default.

If the deal is classified as a default by ratings agencies or credit derivatives traders, it could force European banks to recognise billions of euros in losses in Greek debts that they currently hold, putting their own solvency at risk.

German lenders were previously said to have resisted the long 30-year term of the new loans already backed by the French banks.

French banks have lent the Greek government some 15bn euros, according to data from the Bank of International Settlements, while German lenders hold more than 20bn euros of Greek sovereign debt.

However, unlike their French counterparts, the German lending is thought to be already mainly long-term.

The 3.2bn euros in funding to be reoffered to Greece by German creditors covers debts falling due by the end of 2014, Mr Schaeuble said.

Of this total, some 1.2bn euros was held by the "bad banks" - lenders that had failed during the financial crisis and been taken over by the government.

The news comes the same day that Greece's parliament passed a second vote on its austerity programme, which was needed to secure further financial support from other eurozone governments and the International Monetary Fund.

Athens witnessed protests and riots when the first vote, agreeing the austerity package in principle, was passed on Wednesday.

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Greece passes key austerity vote

29 June 2011 Last updated at 15:35 GMT The BBC's Jon Sopel describes the battle between the police and rioters as one of "cat and mouse"

The Greek parliament has voted in favour of a drastic package of austerity measures intended to save the country from defaulting on its debts.

The proposed tax hikes and spending cuts have been deeply unpopular with the Greek public.

A nationwide 48-hour strike is under way and violent clashes are continuing in the streets of the capital, Athens.

Greece is heavily in debt and the package is needed to win the latest tranche of a 110bn-euro (?98bn) loan.

MPs passed the measures by 155 votes to 138.

They will hold a second vote on Thursday aimed at law reforms that would allow the package to be implemented.

'No time to step back'

Ahead of the vote, PM George Papandreou urged MPs to approve the package by consensus.

Continue reading the main story

Total Greek debt

Greece is about to get a second bail-out from the EU, aimed at helping pay its debts until 2014. It also has to agree more cuts as part of the deal.

The economy

The Greek economy is in dire straits. Retail sales have fallen 18% since 2008 and manufacturing output has dropped 30% in the same period.

Working population

Greeks retire on average at 61. Tax evasion is widespread. Until 2010, public sector workers received two months extra pay a year in bonuses.

EU demands

To meet EU demands, Greece must sell 50bn euros-worth of public assets by 2014, equal to 20% of GDP. Public sector pay is being cut 15%.BACK {current} of {total} NEXT He had faced wavering support from within his governing Panhellenic Socialist Movement (Pasok), which has a slim majority, with 155 seats out of 300 in parliament. But in the end, only one Pasok deputy voted against the package.

Mr Papandreou says his austerity plan is the only way to get Greece back on its feet.

"We must avoid the country's collapse at all costs. Now is not the time to step back," he told deputies.

Were his 28bn-euro austerity package to be rejected, Greece could run out of money within weeks, as the EU and the International Monetary Fund want the measures implemented before they release more funds to help Greece pay off its vast debts.

Top EU officials welcomed the result as a "vote of national responsibility", saying it had pulled Greece away from the "very grave scenario of default" while paving the way for a second aid package.

"The country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform," European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy said in a joint statement.

'Unfair but necessary'

Shortly after the vote, dozens of rioters using ladders broke into the first floor of a nearby office on Syntagma Square before being driven out by police, witnesses said.

Continue reading the main story

No one in Greece believes the tax increases, lay-offs, privatisations will ever be fully implemented. ”

End Quote Gavin Hewitt BBC Europe editor Clashes are continuing outside parliament on Syntagma Square between masked protesters - armed with rocks and sticks - and riot police firing tear gas and stun grenades. Injuries have been reported on both sides.

The air is thick with plumes of tear gas and smoke emanating from a fire lit by arsonists near the finance ministry on Syntagma Square.

Greek unions are angry that the government's austerity programme will impose taxes on those earning the minimum wage, following months of other cuts that have seen unemployment rise to more than 16%.

The vote covered the first part of Greece's austerity package, focusing on raising taxes to secure some 14.09bn euros over the next five years and introducing 14.32bn euros in public spending cuts.

The package is needed to secure the next instalment of the country's 110bn-euro bail-out to be released by the EU and IMF.

Ahead of Wednesday's vote, the governor of Greece's central bank, George Provopoulos, said a 'no' vote would be "suicide" for the country.

Thursday's vote is over the implementation of different parts of the package, such as tax rises and the sale of state assets.

Continue reading the main story June 29: Parliament approves new austerity package June 30: MPs to vote on details of implementing packageJuly 3: EU will sign off latest bail-out payment to Greece - 12bn euros - if both votes are passedJuly 15: Without the 12bn euros, Greece will defaultOnce passed, European officials will start to finalise the details of a second bail-out, worth an estimated 120bn euros, designed to help Greece pay its debts until the end of 2014.

The impact of the Greek vote would be felt worldwide said Herman Van Rompuy, president of the EU Commission, on Tuesday.

Recently appointed Finance Minister Evangelos Venizelos acknowledged that the cuts were "unfair", though absolutely necessary.

But the main opposition leader, Antonis Samaras of the New Democracy party, said the thinking behind the austerity package was flawed, and that tax rates should be lowered rather than raised in order to stimulate the economy.

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Greece vote protests turn violent

28 June 2011 Last updated at 17:05 GMT The BBC's Jon Sopel: "There are moments of calm then the violence flares"

Police have fired tear gas in running battles with stone-throwing youths in Athens, where a 48-hour general strike is being held against a parliamentary vote on tough austerity measures.

Thousands of protesters have gathered outside parliament in the capital where public transport has ground to a halt.

PM George Papandreou has said that only his 28bn-euro (?25bn) austerity plan would get Greece back on its feet.

If the package is not approved, Greece could run out of money within weeks.

Without a new plan in place, the EU and IMF say they will withhold 12bn euros of loans which Greece needs to repay debts due in mid-July.

'Declared war'

More than 5,000 police officers were deployed in the centre of Athens as the protesters marched towards parliament.

The rally started peacefully, but escalated into running skirmishes on the fringes of the main demonstration.

Continue reading the main story BACK {current} of {total} NEXT Hundreds of protesters with faces covered by scarves or gas-masks started throwing stones, debris and bottles at the police in one corner of the central Syntagma Square.

Police fired tear gas and stun grenades to keep them back.

Two communications vans with mobile telecoms transmitters were daubed with graffiti condemning the media and banks before being set alight by protesters who had apparently mistaken them for satellite TV trucks.

Four police officers and four demonstrators were injured in the scuffles, police said, while a number of demonstrators were treated for breathing difficulties.

Some 18 people were detained by police, Reuters reported.

There were also skirmishes as trade unionists tried to persuade anarchists to leave the square, saying their violent protests were only harming the aims of the demonstrations, says the BBC's Jon Sopel in Athens.

The general strike has halted most public services, banks are closed and hospitals are operating on skeleton staff.

Airports are shutting for hours at a time, with air traffic controllers walking out between 0800 and 1200 (0500-0900 GMT) and 1800 and 2200 (1500-1900 GMT).

A number of flights were also cancelled at Athens international airport.

Trains, buses and ferries are also affected.

In Athens, the metro is the only form of public transport which will work "so as to allow Athenians to join the planned protests in the capital", metro drivers said.

Continue reading the main story Malcolm Brabant BBC News, Athens

It was a very Greek riot, complete with an angry, Orthodox cassock-clad priest in among the anarchists.

Impervious to clouds of tear gas and flying chunks of marble, smashed by sledgehammer-wielding youths from the walls of a fountain, the priest went face to face with riot police, telling them to leave the square.

He seemed to be preaching to the converted. Although 5,000 police were supposedly deployed in Athens to protect the city centre, they surrendered Syntagma Square to the anarchists, moving back to form defensive lines around the parliament.

The promises of the Socialist government to never again allow a repeat of the riots of 2008 went up in flames.

Protesters blockaded the port of Piraeus, near Athens, which links most Greek islands with the mainland.

"The situation that the workers are undergoing is tragic and we are near poverty levels," said Spyros Linardopoulos, a protester with the PAME union at the blockade.

"The government has declared war and to this war we will answer back with war."

The unions are angry that the government's austerity programme will impose taxes on those earning the minimum wage, following months of other cuts which have seen unemployment rise to more than 16%.

Polls suggest that between 70% and 80% of Greek people oppose the austerity plan.

"We're opposed to what they're trying to do to us," said bank worker Kali Patouna.

"We know very well that these measures will be our tombstone. They will have extreme consequences for workers and for everyone on all social levels."

'Flawed' plans

The austerity package and implementation law must be passed in separate votes on Wednesday and Thursday.

Continue reading the main story June 29: Greek parliament to vote on a new austerity packageJuly 3: Eurozone deadline. EU will sign off latest bail-out payment to Greece - 12bn euros - if austerity package has passedJuly 15: Default deadline: Without the 12bn euros it needs to make debt repayments, Greece will defaultIf the measures are passed, the next instalment of Greece's 110bn-euro bail-out will be released by the European Union and International Monetary Fund.

European officials will also start to finalise the details of a second bail-out - worth an estimated 120bn euros - designed to help Greece pay its debts until the end of 2014.

EU President Herman Van Rompuy said the impact of the Greek vote would be felt worldwide.

"There are decisive moments and the coming hours will be decisive, crucial for the Greek people, but also for the eurozone and the stability of the world economy," AFP quoted Mr Van Rompuy as telling the European parliament on Tuesday.

The BBC's Chris Morris in Athens says defeat for the government this week would send ripples of anxiety right across the eurozone, with Greece facing the prospect next month of becoming the first member state to default on its debts.

Continue reading the main story

We are handling our country's history right now and nobody can play with that”

End Quote Evangelos Venizelos Greek Finance Minister Mr Papandreou has warned that failure to secure the new loans would mean that national coffers could be empty within days.

The recently-appointed Finance Minister Evangelos Venizelos acknowledged that the cuts were "unfair", but said they were absolutely necessary.

He called on MPs to back the measures, saying both the government and the opposition were "running out of time".

"We are handling our country's history right now and nobody can play with that," he said.

But the main opposition leader, Antonis Samaras of the New Democracy party, said the thinking behind the austerity package was flawed and that tax rates should be lowered rather than raised in order to stimulate the economy.

The outcome of the debate is uncertain. Mr Papandreou faces opposition from within the governing Panhellenic Socialist Movement (Pasok), with two MPs saying they may oppose the bill.

The party has a slim majority, with 155 seats out of 300 in parliament.

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European banks 'can help Greece'

28 June 2011 Last updated at 08:39 GMT A 48 hour general strike is underway in Greece The boss of Italy's biggest bank says Europe's banks can work together with European institutions to help Greece.

"I think there is room for strong collaboration," said Corrado Passera, chief executive of Intesa Sanpaolo.

On Monday, French President Nicolas Sarkozy said French banks had agreed to extend their loans to Greece.

Eurozone officials are trying to find a way for banks to support Greece's bail-out without the country being judged to have defaulted on its debt.

Credit ratings agencies have warned that if banks agree to extend their loans to Greece, even voluntarily, they may judge it to be a debt default, which would cause even more problems for Greece.

President Sarkozy's idea was that when banks are repaid money they are owed by Greece, they should keep 30% of it, re-lend 50% of it to Greece for 30 years and put the remaining 20% into a special fund of high-quality bonds, which would insure them against a future Greek debt default.

French banks have the biggest exposure to Greek debt, while Italy has relatively low exposure.

The deal may be unpopular with Germany, because the new bonds would be insured by eurozone bail-out funds.

Continue reading the main story

There all manner of flaws and uncertainties in the scheme, according to bankers to whom I've spoken ”

End Quote Robert Peston Business editor, BBC News The French plan has yet to be agreed either with eurozone leaders or the Greek government.

BBC business editor Robert Peston says the real problem with the proposals is that there has been no attempt to reduce the amount of money that Greece owns, unlike in the Brady bonds for indebted countries such as Mexico, Argentina and Brazil, on which President Sarkozy's plans were based.

Nonetheless, German banks are reported to be very interested in the French model being discussed.

They were discussed by a group of international bankers, who met eurozone officials to discuss the crisis on Monday.

Also, the head of the eurozone's rescue fund, Klaus Regling, is talking to the ratings agencies to explore ways to avoid a second bail-out being considered a default.

European policymakers, notably the European Central Bank, are concerned that the bail-out could force European banks to recognise billions of euros in losses on Greek debts they currently hold, and could also trigger payouts on credit derivative contracts.

Credit derivative contracts are, in this case, bets that Greece will default on its debt. They are used partly as insurance by banks that have bought Greek bonds.

The Greek parliament is discussing a new range of austerity measures, which include introducing income tax on earnings of 8,000 euros (?7,142, $11,600), and is due to vote on the package later in the week.

The ruling party has 155 seats in a 300-seat parliament. Polls suggest the proposals are opposed by three quarters of Greece's 11 million population.

The austerity measures must be agreed before Greece can get its hands on the latest slice of the original 110bn euro support package.

A 48 hour general strike is underway in protest at the measures.

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Eurozone delays Greece decision

20 June 2011 Last updated at 18:19 GMT Many Greeks are opposed to further cuts, which the government says are absolutely crucial Eurozone finance ministers have postponed their decision on a 12bn-euro ($17bn; ?10bn) loan to Greece until it introduces further austerity measures.

The ministers said they expected to pay the latest tranche of a much larger aid package by mid-July.

But its release depends on the Greek government surviving a vote of confidence on Tuesday.

Parliament then must also pass 28bn euros worth of new spending cuts and economic reforms.

This latest tranche - of a 110bn-euro European Union and International Monetary Fund aid package - is crucial as Greece needs the aid by July to pay off the creditors of its huge debts.

But there are also practical questions about whether the country can implement the reforms being demanded in return.

Greeks have already seen wages and pensions cut and there have been regular, mass demonstrations - even riots - in protest.

Continue reading the main story

Letting Greece default in a disorderly, uncontrolled way would probably be a good deal worse for the global economy than Lehman's collapse”

End Quote Robert Peston Business editor, BBC News The latest public opposition to the cutbacks involves Greek workers at the state-owned electricity company, who are on the first day of a 48-hour strike.

Privatisation fears

After a seven-hour meeting in Luxembourg that ended early on Monday, the finance ministers said they would not approve the disbursement to Greece of the 12bn euros (8.7bn euros from eurozone governments and 3.3bn euros from the IMF) until the country's parliament passed the fiscal strategy and privatisation laws.

Asked how Greece could privatise a large state-controlled company every 10 days, as the current plans envision, Luxembourg Prime Minister Jean-Claude Juncker replied: "They will have to do so."

"This is something that affects me greatly," said Mr Juncker, who also chairs the meetings of the 17 eurozone finance ministers. "You look at the reaction of the people on the streets. You see they are rebelling."

The EU's economic and monetary affairs commissioner Olli Rehn said he was "certain that Greece will be able to take the decisions needed because the alternative is so much worse".

Continue reading the main story May 2010: EU and IMF agree bail-out package to prevent Greece defaulting on its debts; in return, Greece agrees to make 30bn euros of budget cuts over the next three yearsFebruary 2011: EU and IMF experts tell Greece it must make further cuts to keep recovery on trackApril 2011: EU figures reveal Greek deficit revised up to 10.5% of GDP, worse than previously thoughtMay 2011: Greece begins privatisation programme but is warned the IMF may not release more funds as Athens cannot guarantee it will remain solvent for next 12 monthsThe IMF said in a report that the eurozone's prospects depended on Greece and other bailed-out members righting their economies.

"A broadly sound recovery continues, but the sovereign crisis in the periphery threatens to overwhelm this favourable outlook," the body said.

In an effort to get the bills passed in parliament, the Greek prime minister last week reshuffled his cabinet, including appointing a new finance minister: Evangelos Venizelos.

"We have plenty to do, on a daily basis," Mr Venizelos said. "The political time has been compressed a lot. Each day is of extreme importance and hence we cannot afford to waste a single hour."

The government faces a vote of confidence on Tuesday but opposition parties are split over how to cut the country's growing budget deficit.

"In light of the government's thin majority of currently only four votes, support of the Greek parliament for more austerity measures is far from certain," said Tobias Blattner, a former European Central Bank economist who works at Daiwa.

New aid

A new bail-out package about the same size as the first was also agreed in principle by EU finance ministers on Sunday.

The new aid package, to be outlined by early July, will include loans from other eurozone countries.

It is also expected to feature a voluntary contribution from private investors, who will be invited to buy up new Greek bonds as old ones mature.

Mr Juncker said that money had to be freely given - or it would be seen as a technical default on debt repayments: "It is absolutely clear that no pressure will be put on the financial institutions, so as to avoid a Greek selective default. Voluntary means voluntary."

If Greece were to default - or seen to be in default - it would mean massive losses for European banks that hold Greek debt, including the European Central Bank.

Officials said the new plan was expected to fund Greece into late 2014 and total about 120bn euros.

Inspectors for the EU and IMF will make another visit to Athens on Tuesday in what the European Commission said would be a "technical mission".

The visit, which comes after teams from both bodies have spent months poring through the country's accounts, is unscheduled and the Commission did not say what its objective would be.

Stock markets and the euro fell early on Monday, pressured by the lack of resolution to the Greek crisis.

Leading indexes in Frankfurt, Paris and London were all down around 1% and the euro lost 0.5% against the US dollar in early trading, but stock markets and the euro later recovered to show only minor falls.

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