Eurozone Leaders Agree £96bn Greek Bailout
Friday 22 July 2011 9:53 AM
Eurozone leaders have announced the details of a second bailout for the debt-ridden Greek economy following an emergency meeting in Brussels.
The plan will include financing from both the European Union (EU) and the International Monetary Fund (IMF), as well as the private sector.
The Greek economy will get an injection of 109bn euros (£95.9bn) with more from the private sector in the coming decades.
It is hoped the announcement will help to calm fears that the eurozone debt crisis will spread to the much larger economies of Italy and Spain.
Immediately after the plan was revealed, the euro rose against other world currencies and share prices also made gains.
British Chancellor George Osborne welcomed the package, praising leaders for "decisive economic action".
He said: "The first thing British taxpayers should know is that we have delivered on our promise to keep the UK out of the Greek bailout.
"But Britain also has a huge interest in a stable eurozone. (The) package from eurozone countries to support Greece is an important and positive development.
"Even more positive is the demonstration that eurozone political leaders can take decisive economic action."
This is the first time that private lenders have been involved in the bailout of a eurozone economy.
European Council president Herman van Rompuy outlined what the eurozone's 17 member nations had agreed.
"We reached three important decisions fully supported by all of us," he said.
"We improved Greek debt sustainability, we took measures to stop the risk of contagion and finally we committed to improve the eurozone's crisis management."
Under the plan, the private sector will provide 135bn euros (£120bn) during the next 30 years through a variety of measures including a debt buy-back programme.
As well as the buy-back scheme, private sector creditors will be offered three other ways to help cut Greece's debt pile by 13.5bn euros (£11.9bn).
Greek prime minister George Papandreou said the agreement would help ease the burden on his country.
Sky's Europe correspondent Alex Rossi said there had been "dithering and bickering amongst the leaders" during the day.
But he said there had been signs there would be agreement early on Thursday when it appeared there was consensus between France and Germany - the eurozone's two largest economies.
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