After numerous debates, negotiations and disappointments terms have finally been agreed for the next stage of Greek aid.
Efforts to retain the struggling nation as a solvent member of the Eurozone have seen mixed results thus far but finance ministers from the 17-nation currency bloc now feel they have the formula right for solving the problem of Greek debt.
Luxembourg Prime Minister Jean-Claude Junker announced to reporters: ‘This has been a very difficult deal. All initiatives decided upon today will bring Greece’s public debt clearly back on a sustainable path’.
Rates on bailout loans will now be slashed while interest payments will be suspended for a decade, giving Greece more time and easier terms for repayment.
In December the nation will also receive a 34.4 billion Euro loan instalment.
The International Monetary Fund and European Central Bank were in accordance with Eurozone financial chiefs and their decision caused the Euro and Greek bonds to rise, with the former hitting a three-week high against the US Dollar.
President of the ECB Mario Draghi said this of the decision: ‘I very much welcome the decisions taken by the ministers of finance. They will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece.’
Although the IMF originally specified that Greece must trim its debt from 190 per cent of gross domestic product to 120 per cent by 2020 they have now conceded slightly and allowed the target to be raised to 124 per cent.
Christine Lagarde, Managing Director of the IMF, commented: ‘These are solid commitments that should help Greece to recover enough and regain access to markets as planned if it takes reform measures to improve its competitiveness’.
Germany, Finland and the Netherlands stood their ground and refused to discuss the possibility of a debt cut.
All debt-reducing measures are also dependent on Greece upholding its end of the bargain.
December the 13th has been set as the day on which a formal decision will be reached regarding unlocking the next round of Greek aid.
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