Greece 'should have control of own budgets'

Greece is responding angrily to suggestions it should give up control of its budget, which may be the price of Europe's stepping in to save the country's economy.

Former Greek Economy Minister Louka Katseli said Greece should have control of its own finances.

"There is full complicance with what we have promised to deliver. No other country has managed in two years to reduce its budget defict by 6% of its GDP," she said.

Meanwhile, International Monetary Fund chief Christine Lagarde has said a new "fiscal compact" will be signed by European Union members.

Greece and investors who own its bonds have reached a tentative deal to significantly reduce the country's debt, paving the way for it to receive a much-needed €130bn bailout.

Greek bondholders last night said the two sides were finalising a deal along the lines of a proposal made by Eurozone chairman Jean-Claude Juncker, which would see a lower interest rate on longer-dated bonds that Athens will swap for existing debt.

The deal could become final next week.