EUROPE has moved within striking distance of a deal to allow debt-laden Greece to send for IMF aid, with leaders due to announce an agreement within 36 hours.
Greece's partners in the 16-nation eurozone were "close" to concluding an accord giving the IMF the "central" role in granting Athens loans, in exchange for tough sanctions for eurozone budget transgressors, a European diplomatic source told AFP.
The deal, which would see eurozone nations contribute on top of the International Monetary Fund, was brokered between France and Germany, whose Chancellor Angela Merkel had held firm all week against urgent calls to give Athens a helping hand.
Helped along by full-time EU president Herman Van Rompuy, it was due to be announced on Thursday morning in Brussels at a specially-convened summit of eurozone leaders ahead of a full EU gathering.
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"The eurozone aid will only be forthcoming as a complement to IMF loans," the source underlined.
"It's mixed assistance, but the IMF will play a central role," added the source, who also stressed the German drive for tighter rules on partners' budgetary management.
The source said the Germans want to "simplify complicated current procedures" and allow Brussels to trigger more "automatic" sanctions against countries that breach commitments on annual deficits and accumulated debt.
While Berlin now accepts that a future mechanism for helping wayward eurozone members may be introduced, Ms Merkel would be avoiding pressure to cough up the lion's share of any effective bailout for the Greeks.
Given polls showing strong German resistance to direct financial aid, Ms Merkel would also be able to present a firm negotiating success ahead of key regional elections in May.
Signs had appeared earlier in the day that Paris was backtracking on demands for full eurozone solidarity, in the face of resolute German refusal to countenance any deal before the full summit of 27 EU leaders convened by Mr Van Rompuy.
The French government had indicated that Paris was softening its resistance to a series of Merkel demands -- on IMF involvement, on timing and on the scope of sanctions that could be introduced.
"Different views" in Europe will "doubtless come together somewhere in the middle," the French government source said.
Paris signalled it would even accept "debate" on Berlin's demand that countries that consistently fail to balance their books could be expelled from the eurozone.
German parliamentary sources said Ms Merkel told lawmakers that compromise in Berlin was conditional on Greece going first to the IMF.
After days of mounting pressure from EU partners, Die Welt also reported overnight that Ms Merkel would sign up provided eurozone countries accept strict rules on budgetary management.
French President Nicolas Sarkozy and Spanish Prime Minister Jose Luis Rodriguez Zapatero stepped up calls initiated by Mr Van Rompuy on Monday for a summit of Eurogroup leaders to precede the full EU gathering - only the second in the euro currency's decade-long existence.
Compared by German media this week to former British premier Margaret Thatcher, over her hard bargaining on a rebate for British taxpayers to make up for huge French farming subsidies, Ms Merkel's partners will be looking for a positive reaction on international markets.
Burdened by debt of nearly €300 billion ($440 billion), Athens insisted overnight that it was not approaching its European partners as a "beggar."
Nashville People in BusinessEU presidency wants Greek aid decision
