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Deal reached on 2nd Greek bailout

02-22-2012 10:08 BJT

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A deal has FINALLY been reached on a rescue package for Greece helping the nation avoid a messy default that would have thrown the region into further financial turmoil. Eurozone finance ministers and private sector representatives finalized the deal in the early morning hours of Tuesday in Brussels that will provide 130 billion euros of new financing and help to cut Athens' debt-to-GDP ratio to 120.5 percent by 2020. Have a look at our top story.

An all-nighter round of talks in Brussels eventually produced a deal for Greece, the epicentre of the European debt crisis.

Greek Prime Minister Lucas Papademos, left, speaks with Luxembourg's Prime
Minister Jean-Claude Juncker, center, during a round table meeting of eurozone
finance ministers at the EU Council building in Brussels on Monday, Feb. 20, 2012.

Jean-Claude Juncker said:" After a meeting of I think at least 13 or 14 hours, we have reached a far reaching agreement on Greece's new program and private sector involvement that will lead to a very significant tax reduction for Greece and pave the way towards an unprecedented amount of new official financing being provided by the EFSF (European Financial Stability Facility) to secure Greece's future in the Euro area."

It's also a crucial agreement for the entire eurozone. After plenty of debate regarding the deal, the agreement was welcomed by all sides in Brussels.

Greek Finance Minister Evangelos Venizelos, left, gestures while speaking with
European Central Bank President Mario Draghi, second right, during a round
table meeting of eurozone finance ministers at the EU Council building in
Brussels on Monday, Feb. 20, 2012.

According to reports, private holders of Greek debt will have to agree to take more substantial losses than previously expected.

The investors, mostly banks and investment funds, have agreed to swap their bonds for ones with longer maturities and lower interest rates.

IMF chief, Christine Lagarde, praised the efforts made by finance ministers and sounded an optimistic note on Greece's recovery.

The second bailout package is a critical part of lowering Greece's debt so that it can eventually be paid off. Without the rescue funds, Greece would have defaulted on a 14.5 billion U.S. dollars bond issue that is due next month.

Editor:Bai Yang |Source: CNTV.CN

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