27 Nov 2012

Eurozone ministers, IMF agree Greek bailout deal

6:51 pm on 27 November 2012

Eurozone finance ministers and the International Monetary Fund have reached a deal on an urgently needed bailout for debt-laden Greece.

They have agreed to cut debts by €40 billion and have paved the way for releasing the next tranche of bailout loans - some €44 billion euros, the BBC reports.

Greek Prime Minister Antonis Samaras welcomed the deal, saying "a new day begins for all Greeks".

The breakthrough came after more than 10 hours of talks in Brussels on Monday and was the eurozone's third meeting in two weeks on Greece.

The deal opens the way for support for the country's teetering banks and will allow the government to pay wages and pensions in December.

The leader of the finance ministers' group, Jean-Claude Juncker, said Greece would get the next instalment of cash on 13 December. Greece has been waiting since June for the tranche, to help its heavily indebted economy stay afloat.

International lenders have agreed to take steps to reduce the country's debts, from an estimated 144%, to 124% of its gross domestic product by 2020.

These include cutting the interest rate on loans to Greece, and returning €11 billion to Athens in profits from European Central Bank purchases of Greek government bonds. Ministers also will help Greece buy back its own bonds from private investors.

So far the ECB, IMF and the European Commission have pledged €240 billion in rescue loans, of which Greece has received about €150 billion.

In return, Greece has had to impose several rounds of austerity measures and submit its economy to scrutiny.