EU approves bailout plan for Greece

ATLANTA (CNN) -- German Chancellor Angela Merkel planned a news conference Friday after her victory in securing a bailout plan for Greece that involves funds from both Europe and the International Monetary Fund.

European leaders meeting at a summit in Brussels on Thursday approved an emergency bailout plan that could be used to rescue the Greek economy and keep its financial crisis from spreading across the continent.

The size of the loan package was not immediately available.

The funding package "guarantees the protection of financial stability in the euro zone," said Greek Prime Minister George Papandreou, according to CNN affiliate ERT. "It is an important decision we took today."

The Greek economy's problems imperil the rest of the euro zone -- the 16 nations that use the euro as their currency.

The bailout would include money from euro-area member states, but it also controversially involves "substantial International Monetary Fund financing," according to a statement from the leaders at the summit. EU leaders had been reluctant to accept outside help for one of their own.

Merkel had pushed for a plan involving the IMF, eager to show Germans that their country would not have to foot the entire bill to help Greece.

"As part of a package involving substantial International Monetary Fund financing and a majority of European financing, euro-area member states are ready to contribute to coordinated bilateral loans," said a statement from European heads of government and state.

A European-backed loan package would require the unanimous approval of European Union members, meaning any euro zone country would have effective veto power.

"Any disbursement on the bilateral loans would be decided by the euro-area member states by unanimity, subject to strong conditionality and based on an assessment by the European Commission and the European Central Bank," the statement said.

The Greek government revealed late last year that its budget deficit was 12.7% of its gross domestic product, far exceeding the European Union limit of 3%. Countries participating in the EU must agree to that condition and other economic goals.

Greece aims to reduce that deficit to 8.7% this year and to reach the EU target by 2012.

On Friday, leaders planned to discuss preparations for next month's G-20 meeting in Washington. They also planned to discuss how to secure global commitment to climate change goals after the United Nations conference on climate change in Copenhagen, Denmark, in December.