French President Nicolas Sarkozy and German Chancellor Angela Merkel hashed out a deal on a Greek bailout. Photo credit: Sebastian Zwez

Eurozone leaders agreed on a rescue package for ailing Greece last night, one that would include assistance from the International Monetary Fund as well as bilateral loans from fellow eurozone members – prompting a big sigh of relief from Greece as well as the holders of Greek bonds.

Under the current plan, forged by French President Nicolas Sarkozy and German Chancellor Angela Merkel, both leaders facing intense scrutiny and pressure from their home countries, Greece would see loans from its eurozone partners and the IMF. The breakdown would be two-thirds eurozone and one-third IMF, The Financial Times reported today.

“There is joy and harmony in euro world today,” Tony Barber wrote on The Financial Times’ Brussels blog, noting that a good deal of that joy may also be coming from the fact that this agreement does not require a re-opening of the Lisbon treaty, a messy complication no one was looking forward to.

But despite acting as a bit of a tonic for the jittery euro markets (the euro rose against the dollar today) and apparently being generally approved by the parties involved, the bailout plan hasn’t won everyone over.

Stephen Fidler in The Wall Street Journal contended that the eurozone’s troubles aren’t nearly over yet: “European leaders may have bought some time by backing in principle a bailout for Greece, but even if the money is handed over, it will be no silver bullet for Greece or for the euro zone. That’s because the euro zone’s problems are not limited to Greece and not solely related to government debt and budget deficits.”

And some observers are wondering if maybe the eurozone would be a better place after all if Greece wasn’t part of it. A group of German economics academics wrote, in an op-ed in The Financial Times last night that Greece’s membership in the eurozone, as it teeters on the brink of bankruptcy, has left it unable to make the necessary devaluations to its currency. “So the Greeks have no way out but through the exit door. Restoring the drachma at a lower exchange rate would help exports and lift revenues from tourism. It would also send a message to other countries that they have to take serious steps to avoid landing in a similar predicament. Loss of confidence in Greek economics imperils all of Europe,” they conclude. “Removing Greece from the euro provides a way of preventing a drama from becoming a tragedy – and of ensuring the survival of monetary union.”