European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health.
In the latest bid to keep the 17-nation euro intact, the ministers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion-euro ($44.7 billion) loan instalment in December. Greek bonds rose.
“This has been a very difficult deal,” Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels after chairing a 13-hour meeting that ended early today. “All initiatives decided upon today will bring Greece's public debt clearly back on a sustainable path.”
After 240 billion euros in loan pledges and the biggest writedown of privately held debt failed to turn Greece around, the creditor governments led by Germany proclaimed the latest fix just as they grappled with swelling financing needs in Cyprus and a potential aid request by Spain, the fourth-largest euro economy.
Eoin Treacy's view Today's decision to ease the terms of Greece's bailout are to be welcomed and despite continued unease about the scale of the challenge facing the country the outlook for the integrity of the Euro is increasingly positive.
The Deutsche Bank Trade Weighted Euro Index has been ranging in the region of the 200-day MA since September and will need to sustain a move above 121.5 to re-affirm demand dominance.