October 27th, 2011
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EU arrives at Greece bail out decision

EU-PresidentAthens: Greece grasps onto the last straw. European leaders have decided to extend a helping hand to pull up sinking Greece from acute poverty. The leaders agreed this morning on a crucial plan to reduce Greece’s debts and provide it with more rescue loans so that the faltering country can eventually dig out from under its debt burden.

This is an attempt to restore confidence in Europe’s ability to pay its debts and prevent the 2-year-old crisis from pushing the continent and much of the developed world back into recession.

Emerging from the marathon summit,  EU President Herman Van Rompuy said that the deal will reduce Greece’s debt to 120 percent of its GDP in 2020. Under current conditions, it would have grown to 180 percent. That will require banks to take on 50 percent losses on their Greek bond holdings a hard-fought deal that negotiators will now have to sell to individual bondholders.

Mr. Van Rompuy also said the euro-zone and International Monetary Fund which have both been propping the country up with loans since May of 2010 will give the country another 100 billion ($140 billion). That’s slightly less than amount agreed in July, presumably because the banks will now pick up more of the slack.

“These are exceptional measures for exceptional times. Europe must never find itself in this situation again,” European Commission President Jose Manuel Barroso said after the meetings.

French President Nicolas Sarkozy said, The EU leaders would present the historic deal to international partners at next week’s Group of 20 summit in Cannes, France. The steps taken would “calm the markets and allow Greece to return to a normal growth path,” Mr Sarkozy said.





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