The Greek debt crisis: billion will be more pumped to bring relief to the Greece

The IMF said it was "ready to continue to support" for the country, providing that the Government has introduced far-reaching economic reforms. He threatened not to support the Greece, which was to be paid next month, but it is now thought unlikely.

A new package to bail out, the second in 13 months, should be accepted in the next few weeks.

The economic official of the European Union, an Olli Rehn, stated that wait for the EU and the IMF to release a loan of EUR 12 billion in early July to keep solvent Greece.

The Greece has been warned last night that it must introduce austerity cuts and not by default on repayments on its loan of emergency to bail out the as a condition of the new deal.

Fears that the Greece was failing to repay its debts has shaken financial markets yesterday.

At one point, the value of the FTSE 100 had decreased by 1.5 percentage points.

But after the IMF statement, shares began to recover. By the close of trading the FTSE had fallen by 0.76 percentage points to 5,699, a loss of over $ 10 billion to £. The euro fell against other currencies.

Yesterday evening, Greek Prime Minister George Papandreou, announced a cabinet reshuffle and said that he would be for a vote of confidence that he seeks to force by reducing expenditures and tax rises against widespread opposition.

An attempt to form a Government of national unity failed. The country has been marred by strikes and riots this week while several politicians have resigned in protest against the proposed austerity drive.

The Greece credit rating was cut to the lowest in the world and its debts is now considered less secure than those in poor developing countries. There were fears that, if the Greece by default on debt repayments, other countries such as the Ireland could be tempted to follow suit, leading to another financial crisis.

Herman Van Rompuy, President of the European Union, said yesterday evening that the euro would emerge stronger from the crisis.

Mr Rehn admitted that it would take more time to implement a second rescue plan for the Greece because of differences on how to

private investors share the burden.

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