European Leaders Approve Bailout for Greece
European Finance Ministers reached an accord to provide € 130 billion in aid to Greece in order to ensure the country can continue, at least over the short-term, to meet its debt obligations instead of defaulting on them. A default would damage the Euro and harm the economies of its members which include Germany, France, Spain, and Italy amongst others.
This brings the aggregate amount to € 386 billion awarded or committed to save Greece, Portugal and Ireland from defaulting on their debt and therefore to protect Europe from financial calamity.
The latest agreement was reached in the wee hours of this morning, and saw private bankers take huge cuts on their Greek sovereign bond holdings. Also European central banks and Euro member countries also agreed to take cuts to the amounts owed to them by Greece.
Also interest rate payment cuts were agreed across board to about 50 to 150 basis points below prevailing market rates in order to give Greece an opportunity to meet debt interest payments without the need for any more bailouts soon.
Greece also agreed to austerity measures that have shaken up the country, causing violent rallies as the people protest against an estimated € 400 million in denied benefits.
Speaking on the development Greek Prime Minister said, “”It’s no exaggeration to say that today is a historic day for the Greek economy.”