Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Child Migrants In America: What to do about the wave of unaccompanied minors?

Read more

THE INTERVIEW

Abbas Araghchi, Iranian deputy foreign minister

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

FOCUS

When water becomes a weapon of war

Read more

ENCORE!

Eve Ensler: 'In The Body Of The World'

Read more

THE INTERVIEW

Ed Husain, Author of 'The Islamist'

Read more

DEBATE

Pakistan Protests: Democracy put to the test

Read more

DEBATE

Pakistan Protests: Democracy put to the test (part 2)

Read more

REPORTERS

Pakistan: Imran Khan, from the cricket field to politics

Read more

  • IS video purports to show beheading of second US journalist

    Read more

  • Could France sell the Mona Lisa to pay off its debts?

    Read more

  • Video: Bodies ‘left behind’ as Ukraine forces flee rebel assault

    Read more

  • Trust and 'bio-disaster units' needed to fight Ebola

    Read more

  • France vows crackdown on unemployment benefit ‘abusers’

    Read more

  • Julie Gayet wins privacy case against French glossy Closer

    Read more

  • Germany blocks popular car pick-up service Uber

    Read more

  • Several UN peacekeepers killed in Mali explosion

    Read more

  • NATO plans new 'spearhead' force to counter Russia

    Read more

  • French clubs left behind as others spend big

    Read more

  • Britain drops arrest warrant for ill boy’s parents

    Read more

  • When water becomes a weapon of war

    Read more

  • Arab media strike back at IS Islamists – with cartoons

    Read more

  • US military targets Somalia's al Shabaab Islamist group

    Read more

  • Eve Ensler: 'In The Body Of The World'

    Read more

  • Boko Haram Islamists seize northeast Nigerian town

    Read more

  • Is Carla Bruni against a political comeback for Sarkozy?

    Read more

  • Monaco’s Falcao leaves Ligue 1 for Man Utd

    Read more

Europe

Eurozone agrees to first instalment of Greek bailout

Text by News Wires

Latest update : 2012-03-01

Eurozone finance ministers agreed Thursday to give Greece the first instalment of a multibillion-euro bailout package but said agreement on the final portion, which Greece needs to finance a debt swap with private investors, would come next week.

AP - The finance ministers of the 16 other countries that use the euro on Thursday agreed in principle to give Greece a first batch of bailout money to finance a massive debt relief deal with private investors.

However, the final green light for as much as €93.5 billion ($125.69 billion) -- which Greece needs to implement the debt swap -- will come next week.

After a three-hour meeting in Brussels, the ministers said the payout can go ahead once Athens has passed “a few pending implementing acts” for promised austerity measures and the ministers how many banks and investment funds will actually participate in the bond swap.

A successful implementation of the €107 billion ($143.84 billion) debt relief deal with private bondholders is a precondition for Greece to receive the rest of the €130 billion bailout.

Private investors have until next Thursday to decide whether they will swap their Greek bonds for new ones with a lower face value, lower interest rates and longer repayment periods.

Overall, bondholders will lose more than 70 percent of the value of their holdings, but in return they will receive some of the money they are owed immediately and have at least the hope that they will get some more of it back in 30 years. Without the debt relief deal and the new bailout, Greece would have defaulted on its debts within weeks, potentially sending ripples across the world financial system.

Of the €93.5 billion Greece needs in the coming weeks, as much as €35.5 billion are immediate payouts for banks and other investors participating in the bond swap.

Around €23 billion will be used to recapitalize Greek banks that would otherwise collapse under the losses from the debt relief.

The remaining €35 billion will go as collateral to the European Central Bank while Greece’s own bonds are rated in selective default. That money will be freed up again once Greece’s rating improves.

 

Date created : 2012-03-01

  • GREECE

    Greece secures new bailout, but recovery still in doubt

    Read more

  • GREECE

    Bailout faces overhaul as Greek economy 'much worse' than thought

    Read more

  • GREECE

    Eurozone agrees second €130bn Greek bailout

    Read more

COMMENT(S)