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Merkel: Europe's future at stake in Greek crisis

By the CNN Wire Staff
STORY HIGHLIGHTS
  • Germany is providing the lion's share of the EU funding for Greece
  • EU leaders say the aid is unprecedented but needed to get Greece back on track
  • The Greek government is facing a large deficit and massive debt
  • Its national debt of $394 billion is larger than its entire economy

Berlin, Germany (CNN) -- Europe stands at the crossroads with the economic crisis in Greece, German Chancellor Angela Merkel said Wednesday.

In a government statement at the German parliament, Merkel said the crisis has shown the need for sanctions in case of financial violations of the European Union treaty.

Suspensions of eurozone member countries -- those that use the common currency -- are not out of the question, she added.

"This is about the future of Europe," Merkel said, defending the €110-billion ($145-billion) bailout for Greece, announced Sunday by the European Union.

EU leaders have called the aid unprecedented and say it's needed to get Greece's economy back on track.

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Eurozone member countries are providing €80 billion of the total amount, with up to €30 billion available in the first year, Eurogroup President Jean-Claude Juncker has said.

Germany is providing the lion's share of the EU funding -- €22.4 billion ($28.5 billion) over three years, Merkel's office said Monday. The aid has been unpopular in Germany.

Greece must take tough cost-cutting measures to meet the bailout conditions set by the EU and the International Monetary Fund, which is providing the remaining 30 billion of the bailout.

The Greek government is facing a large deficit and massive debt, threatening the stability of the euro, which is used by Greece and 15 other countries across Europe.

Greece's national debt of 300 billion euros ($394 billion) is larger than the country's economy, and some estimates predict it will reach 120 percent of gross domestic product in 2010.

CNN's Stephanie Halasz in London, England, contributed to this report.