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GREEK CRISIS: Euro zone loan to Greece for him to avoid bankruptcy

AFP - The euro area has given the green light Friday to the payment of a loan to Greece crucial for him to avoid bankruptcy, following the austerity measures decided by Athens, while the country's creditor banks may have to delete the 50% of the national debt.

However, the countries of the monetary union, engaged in marathon negotiations

will last until October 26, remain deeply divided on other aspects of its response to the debt crisis.

Meeting in Brussels to prepare the first European summit Sunday, finance ministers of 17 countries of the monetary union have agreed to release the sixth installment of the loan for Greece, from 8 billion euros, from the foreground rescue the country decided in spring 2010, amounting to 110 billion euros in total.

The envelope is co-financed by the Europeans, to the tune of 5.8 billion euros, and the International Monetary Fund (IMF) which has yet to endorse.Payment is expected in the first half of November in Athens and will not end up insolvent immediately.

The Institution of Washington should make a positive start in November.Its director, the French Christine Lagarde, will make a recommendation to this effect, told AFP a source familiar with the matter.

However, this is only a small step forward given the extent of the difficulties of Greece.

The leaders of the euro area STRIPS in parallel on a response far greater than expected banks in the second aid package to Greece, decided in principle in July and on public loans of 109 billion euros .

According to a report of the troika of creditors of Greece (EU, IMF and ECB) provided to ministers, of which AFP obtained a copy will require banks to accept a depreciation (discount) of 60% of their claims if the we want the $ 109 billion remains unchanged.

A discount of 50%, the IMF and the Europeans and the IMF will have to increase their funding to 114 billion euros, according to the calculations of the report.

It is also necessary that banks voluntarily agree to undergo the further loss of great magnitude.In July, their "effort" was set at only 21%.

More generally, discussions ahead as difficult in the coming days to prevent the contagion of the debt crisis as profound differences between Paris and Berlin remain on the way to do this.

These, and the need for the German Parliament to have a say in advance of the proposed measures have helped to see the ads for a second summit to be held Wednesday evening.

Confirmation of this second peak appeared to reassure financial markets: the Frankfurt Stock Exchange surged 3.55%, 2.83% in Paris, Milan and Madrid from 2.80% to 2.84%.

But in Brussels, the atmosphere remains tense. "We do not really shining example of leadership that works," lamented the leading finance ministers of the euro zone, Jean-Claude Juncker, speaking of image "disastrous" to the abroad.

China on Friday urged the EU to a "fundamental reform" of the finances of his country.And U.S. President Barack Obama continues to monitor the situation closely.

France and Germany are in fact started a few days in a standoff on how best to strengthen the clout of the European Financial Stability (EFSF), a key instrument to prevent contagion of hope crisis debt to countries like Spain and Italy.

Paris insists transform the fund in the bank to that buys from the office of the European Central Bank (ECB), while Berlin rejects this option would be to him against the European treaties.

The French finance minister, Baroin, has shown signs of opening at the end of talks Friday night. The proposal supported by France is "the most effective solution," he said, but Paris "does not make a final point of confrontation."

For his part, his Austrian colleague Maria Fekter said there were only two options on the table to give more weight to the EFSF.And a diplomatic source said that no implied the ECB.

The solution preferred by Berlin would allow the EFSF to ensure a share of the debt securities issued by fragile states, to encourage other investors to buy.

Another topic on the table for the next few days, the issue of recapitalization of banks in Europe.Requirements should eventually reach 80 to 100 billion euros, a figure lower than that suggested by the IMF, said a European source.

A new meeting-like mini-summit between French President Nicolas Sarkozy and German Chancellor Angela Merkel is scheduled Saturday night in Brussels, in the preamble to the appointment on Sunday. Van Rompuy and European Commission President Jose Manuel Barroso will also attend. The ECB President Jean-Claude Trichet, Lagarde and could also be the part, as a European source.