World leaders called for tough new measures by Greece to control its debt mountain as officials reported that talks on a 120 billion euro ($160-billion) bailout deal were nearly complete.
Amid lingering fears that the debt crisis could spread, US President Barack Obama, German Chancellor Angela Merkel and the EU called for resolute action by Greece to control spending.
Merkel and Obama “discussed the importance of resolute action by Greece and timely support from the IMF and Europe to address Greece's economic difficulties,” the White House said.
New signs that Germany is now supporting the bailout helped global markets and the euro currency stabilise after several days of losses caused by the demotion of Greek debt to “junk” status and the downgrading of Portugal and Spain's credit rating.
The euro rebounded from a one-year low on Thursday and Greece’s borrowing costs eased on hopes of an early bailout. The euro rose 0.3 per cent to $1.3254 after tumbling to a one-year low of $1.3113 versus the dollar on Wednesday.
Global equities also advanced after two days of losses, also boosted by the US Fed’s assurance that it would keep interest rates low for an extended period, and robust company earnings.
EU commissioner for economic and monetary affairs Olli Rehn said that marathon talks with Greece were nearly complete. He said EU aid would be conditional on “implementing the decisions required at every stage to meet the conditions of fiscal consolidation and structural reforms.”