Greece: Greek Bond Deal
March 10, 2012 by staff
Greece: Greek Bond Deal, European banks and other investors waved goodbye to £90billion yesterday in a desperate bid to prop up Greece’s shattered economy. Athens said that the vast majority of private creditors – institutions that have lent money to Greece – agreed to write-off more than half of what they are owed by the country.
Analysts said the so-called ‘haircut’ amounted to the biggest sovereign debt default in history – and the first by a eurozone country.
Yesterday’s deal marked a new low in the two-year long crisis and came as figures showed the Greek economy contracted by 7.5 per cent in the final three months of 2011.
The agreement, after months of bitter wrangling, paved the way for Greece to receive a second bailout from the European Union and International Monetary Fund worth £110billion.
It is hoped that the rescue package will stem the crisis crippling the eurozone and stop it spreading to larger countries such as Italy and Spain.
European leaders welcomed the deal, with Greek finance minister Evangelos Venizelos branding it an ‘exceptional success’.
French President Nicolas Sarkozy said: ‘Today the problem is solved. A page in the financial crisis is turning.’ Christine Lagarde, head of the International Monetary Fund, said: ‘Spring is in the air. The real risk of a crisis, of an acute crisis, has been, for the moment, removed.’
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