Greece's Prime Minister Georgios Papandreou arrives at the European Council building ahead of a European Union leaders summit in Brussels March 25, 2010. [Agencies]

BRUSSELS: France and Germany have reached a deal on a financing plan for crisis-hit Greece that will involve EU member states and the International Monetary Fund, the Elysee said on Thursday.

French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed on a joint approach ahead of an EU summit, which risked being wrecked by disagreements over how to deal with Greece, struggling to overcome its financial problems.

A French official said the deal with Merkel opened the way for bilateral loans within a European Union framework combined with loans from the Washington-based IMF.

German Chancellor Angela Merkel attends an interview as she arrives at a meeting of the European People Party (EPP) ahead of a two-day European Summit in Brussels, March 25, 2010. [Agencies]