Eurozone agrees €130bn bailout for Greece

During overnight talks in Brussels, eurozone governments back a second bailout for Greece.

By Alice Gribbin Published 21 February 2012

The euro rose early on Tuesday when a second bailout for debt-laden Greece was agreed after 13 hours of talks.

Greece will receive loans of €130 billion (£110bn) for an aid and austerity programme that has been agreed must reduce the country's debt, by 2020, from 160 per cent to 120.5 per cent of GDP. The deal also includes a write-off of the country's private creditor debt, worth around a further €100 billion (£84bn).

At a press conference in the early hours, the Prime Minister of Luxembourg and president of the Euro group, Jean-Claude Juncker, said:

This new programme provides a comprehensive blueprint for putting the public finances and the economy of Greece back on a sustainable footing and hence for safeguarding financial stability in Greece and in the euro area as a whole.

The EU's economic and monetary affairs commissioner, Olli Rehn, said:

The Greek economy can no longer rely on a large administration financed by cheap debt, but by investment to facilities new growth and jobs.

The new deal causes private holders of Geek debt to lose 53.5 per cent on the value of their bonds. Total loss to investors in the country may reach 70 per cent. The Greek parliament is set to vote on the bailout on Wednesday.

The securing of a second deal will come as a relief to Greece which desperately needed to secure funds by 20 March. This deadline marks the next round of the country's debt repayment of €14.5bn.

Lucas Papademaos, the Greek prime minister, called this morning's breakthrough an "historic day" for the country.

Greece received a first bailout in 2010 from the European Union and International Monetary Fund of €110 billion (£91bn). Despite the injection of funds, the country's economy has not emerged from its debt crisis.

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Tags: Greece Eurozone

8 comments

Mon, 2012-03-05 09:45 — Bill (not verified)

With regard to corruption, does anybody know how to find out how much property your local councillor/planner holds. Clearly they manipulate the planning process in order to increase their property portfolio's, but the Land Registry will not release this information.

Tue, 2012-02-21 13:21 — Henrik (not verified)

Please, NS, say something intelligent about the euro-crisis and the Greek bailout. You can't duck for ever.

Mon, 2012-02-27 08:54 — Bill (not verified)

Reddish beard; "If Britain stays a island".
So what do you propose, building a land bridge?
Ideals that are not based in reality always fall. But its not just the politicians, there are millions of jobsworths who practice the anti-science of bureaucracy.
Europe will never rest in peace, until both the head and body of this monster have been killed off. Removing one without the other will allow these good for nothing parasites to carry on. After all there is no way they can make a fraction of the money in the real world.
There is a good piece in the Dorset Echo about council parasites, and this is being played out a thousand times over, across the EU and UK.

Wed, 2012-02-29 11:42 — Bill (not verified)

Or maybe because of the multi-million pound internet system that will never work to the satisfaction of council employees, or the 18 million spent on intelligent traffic lights (they must be intelligent because they don't work as well as a simple roundabout, but got all this money our of councillors), or the fact that they send council notices to vandals who plant flowers in grass verges!

Tue, 2012-02-28 13:06 — Bill (not verified)

Oop's, the chief parasite of Dorset Council has just resigned.
Can he see the writing on the wall, or is it because of the council offices white-elephant, or Bridport harbour built at the wrong angle, or the beach destroyed at Lyme Regis because of scientific ignorance, of maybe because of the deaths caused by his planners?

Wed, 2012-02-29 12:08 — Bill (not verified)

In rides Oliver Letwin to the rescue.
I'm joking of course.

Tue, 2012-02-21 21:27 — Reginald-Fah-fah

Another bloody hand-out(!)...€130bn for Greece to stay in the 'Euroclub'. The second class EU states are bleeding the first class EU states.

Miliband and Balls hello!!!....New Labour should have done something years ago (!).

It's great to see that the Coalition Government not ratifying EU accounts otherwise known as 'cooked books'! We really need to leave the 'European Kitchen' before there is a fire!

Sun, 2012-02-26 12:17 — Reddish beard (not verified)

This bail-out marks the stead-hardiness of all involved- reform and increasing transparency is its price. This storm is slowing blowing over leaving a better functioning europe. If Britain stays an island then it must bare the grim consequences of not having a say in a New United States- making the efforts of British soldiers who fought in the second world-war quite redundant.

That is until all foreign markets are saturated and Capitalism crumbles ;)