EU officials prepare to implement new financial plan.

A new bailout plan for debt stricken Greece has been agreed "in principle" but this could lead to fresh divisions in Europe and more civil unrest.

Reuters reported that the new plan, which (if agreed) will run until 2014, would replace last year's $160bn bailout and give Greece an extra year of financial support.

The proposals could be implemented within the next few months. But with difficult economic conditions perpetuating throughout Europe there has been significant opposition to a second Greek bailout.

Volker Kauder, a high ranking politician in Germany's ruling CDU party, said: "Greece is trying but its efforts are insufficient."

"Whether there will have to be another aid package for Greece has not yet been decided," he added.

If a member of the EU defaults on its national debt the consequences could be catastrophic for the European economy.

However, bailouts are not popular either meaning more opposition from EU members and stricter austerity in the countries affected.

These factors could create more social and political volatility (disrupting European businesses) and dent confidence in Europe's financial markets.