* Plan would involve money from EU countries, IMF
* To be discussed by other euro zone states (Adds details, quotes)
By Emmanuel Jarry
BRUSSELS, March 25 (Reuters) - France and Germany agreed ona standby aid plan for heavily indebted Greece on Thursday thatwould involve money from European Union member states and theInternational Monetary Fund, the French president"s office said.
French officials said President Nicolas Sarkozy and GermanChancellor Angela Merkel had explained their agreement to EUPresident Herman Van Rompuy, and countries that use the eurowould discuss it later on Thursday. A French official said the deal, agreed in Brussels shortlybefore an EU summit, opened the way for bilateral loans to bemade available under a system mainly involving the euro zone butalso using money from the Washington-based IMF.
"There is agreement on the idea of a European framework.This European framework will be made up of coordinated bilateralloans," a French official said.
"This European framework would be complemented by IMF loanswith clear mention of the fact that the financing would mainlybe European."
The money would be used only if there were "very seriousdifficulties and there was no other solution," he said.
A German official said euro zone states would have to agreeto activate the plan, giving Berlin a veto.
The borrowing rate would not be subsidised but would takeinto account the economic state of the country using the loans.
"This is the framework set out to help countries that couldbe under very strong market stress," the French official said.
Greece has not asked for money to help service its debts buthas said it favours a standby package being made available to reassure investors without Athens having to use the money.
Merkel and Sarkozy also said the Greek debt and deficitcrisis showed the need to strengthen economic governance in theeuro zone -- meaning closer coordination of policy -- to dealwith any threats like those in Greece.
An EU official said any agreement would include increasedbudgetary surveillance of euro zone countries.
"The IMF is a key part of it," the EU official said. "Thereare two parts. There is a part on bilateral loans and there is apart on ... surveillance."
Paris and Berlin called for Van Rompuy to draw up a reportbefore the end of this year laying out all the options forstrengthening preventive mechanisms and sanctions.
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