February 21, 2012
Following marathon talks in Brussels, euro-zone finance ministers have agreed upon a second rescue package for Greece, worth 130 billion euros. The deal saves Athens from having to default in March. As part of the agreement, the private sector will take a 53.5 percent haircut on its holdings of Greek debt.
Its fate had been hanging in the balance for weeks. But in the early hours of Tuesday, euro-zone finance ministers approved a new, €130 billion ($172 billion) rescue package for Greece. The last-minute deal effectively saves the country from bankruptcy. Without the new loans, Greece would have been forced to default on March 20, when €14.5 billion in loans mature.
Euro Group head Jean-Claude Juncker, the prime minister of Luxembourg, announced early on Tuesday that finance ministers had reached "a far-reaching agreement" on the bailout. The deal would "secure Greece's future in the euro area," he said. The announcement came after marathon talks lasting over 12 hours in Brussels.
"It's no exaggeration to say that today is a historic day for the Greek economy," said Greek Prime Minister Lucas Papademos, who had attended the meeting. The euro leapt in value after news of the deal came out, climbing to over $1.32.
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