June 4, 2011
Greece's international creditors inched closer to giving the indebted country a second bailout on Friday as officials acknowledged that without further aid Athens would be unlikely to meet repayments on its huge borrowings.
Eurozone ministers agreed "in principle" to the rescue package during talks in Vienna, European Union sources said. The bailout, reportedly worth €65bn (£58m) to cover maturing debt over the next two years, would have to be finessed before being finally agreed when the Euro Group – the conference of finance ministers of the eurozone countries – next meets on 20 June.
The prospect of the nation securing another injection of cash, barely a year after receiving €110bn in emergency loans from the EU and IMF, assuaged market fears of default as the prime minister, George Papandreou, flew to Luxembourg to convince lenders that he would back up the extra aid with deeper austerity. Premiums on Greek bonds and the cost of insuring Greek debt fell sharply.
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