Tuesday, February 21, 2012

Europe Reaches a Greek Deal

BRUSSELSEuro-zone finance ministers early Tuesday agreed to an ambitious €130 billion ($172.1 billion) rescue deal that will see Greece's private creditors take an even larger loss in order to put the debt-laden country on a sustainable footing and avert a catastrophic default.
The IMF's Christine Lagarde talks with Greek Premier Lucas Papademos before Monday's meeting in Brussels.
The agreement revolves around a debt exchange that calls for private investors to waive 53.5% of their principal under a massive debt swap that will cut Greece's outstanding debt stock by €107 billion. That goes beyond a 50% haircut agreed upon at a summit in October.
Speaking after the conclusion of more than 12 hours of negotiations, Eurogroup chairman Jean-Claude Juncker said the agreement "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 the euro zone."
The deeper private sector haircut will help bring Greece's debt as a proportion of gross domestic product to 120.5% by 2020 from over 164% currently. Read More...


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