July 21, 2011
After years of resistance, European leaders agreed Thursday to reduce Greece’s debt burden in a last-ditch effort to preserve the euro and stem a broader financial panic.
The pact, negotiated in Brussels, is part of a rescue package of 109 billion euros, or $157 billion, for Greece, the most troubled economy in the euro zone. It will force many investors in Greek debt to accept some losses on their bonds.
The deal would also provide substantial debt relief for Ireland and Portugal. And by giving the main European rescue fund increased powers to assist countries that have not been bailed out — like Spain and Italy — leaders are betting that the program, described by some as a new Marshall Plan for Europe, will serve as a firebreak against the contagion that has threatened to engulf some of the region’s largest economies.
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