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Sarkozy: Allowing Greece Into Euro Was Mistake

France's President Nicolas Sarkozy
French President Nicolas Sarkozy has said allowing Greece into the eurozone in 2001 was a "mistake."

In a TV interview, Sarkozy said admitting Greece into the eurozone was a mistake because the country had "entered with false [economic] figures. It was not ready."

But, he added, it could be rescued thanks to the new EU deal on the euro debt crisis.

The plan, announced in Brussels, includes a 50 percent write-off of Greek debt at a cost of 100 billion euros ($140 billion).

EU President Herman Van Rompuy said the deal would reduce Greece's debt to 120 percent of its GDP in 2020. Under current conditions, it would have grown to 180 percent.

Rompuy also said the eurozone and International Monetary Fund would give Greece another 100 billion euros.

Greek Prime Minister George Papandreou said the country's debt was now "sustainable" as a result of the 50 percent debt forgiveness.

European leaders also agreed on enlarging the continent's bailout fund to around 1 trillion euros ($1.4 trillion) to help it protect larger economies like Italy and Spain from the sort of market pressures that pushed Greece to need a rescue.

Financial markets reacted positively to the deal, with shares on European markets surging to a 12-week high in early trading. The euro climbed to $1.40, a seven-week high against the dollar.

A White House statement said U.S. President Barack Obama welcomed the "important decisions" made by the EU on October 27 to address the eurozone crisis, and urged the swift implementation of the deal.

China To Pitch In

In related news, China says it's ready to pump money into the eurozone's bailout fund if European leaders can convince it the investment is safe, senior government advisers told the "Financial Times" daily.

Another source told the paper the cash injection could possibly top $100 billion. The business daily reported that China needs assurances that other countries would contribute to the fund.

"The Financial Times" added that China also needs to be sure that European leaders will refrain from criticizing China's foreign-exchange policy.

Li Daokui, an academic member of China's central bank monetary policy committee, told the paper it was in China's "long-term and intrinsic interest to help Europe."

compiled from agency reports

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