EU leaders agree on Greek bailout. Turning point in euro crisis?
European leaders in Brussels today agreed to a deal for Greece that includes $156 billion in aid, private investors, and extending the maturity period on Greek bonds.
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“The EFSF will be more flexible and effective,” said Mr. Van Rompuy. “In future we won’t be forced to wait for substantial damage to an economy before we can intervene.”Skip to next paragraph
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There are further reforms in the pipeline. By the end of the summer, France and Germany would publish proposals regarding economic governance in the eurozone, Sarkozy announced. “The influence of foreign rating agencies needs to be limited. We are thinking about the creation of a European rating agency.”
EU summits in Brussels hardly ever manage to raise much excitement among citizens of the union, but this was followed closely across the Continent and beyond.
Shares in Europe and North America jumped, particularly those of banks holding Greek debt, as reports of a breakthrough were leaked from the Justus Lipsius building, the headquarters of the European Union in Brussels.
The summit was preceded by a meeting of German Chancellor Angela Merkel and Sarkozy in Berlin Wednesday night. The seven-hour discussions, which included the president of the European Central Bank (ECB), Jean-Claude Trichet, brought agreement on a common German-Franco position as a basis for the Brussels talks. It was at that meeting that France dropped its proposal of a special tax on banks and agreed to have private lenders participate in the bailout package for Greece in return for German willingness to accept new powers for the EFSF.
“There’s a possibility Greece will need yet another bailout,” said Mr. Beattie. “Still, this could be a turning point in the eurozone crisis. Ireland and Portugal will now be able to receive much cheaper help.”
Greek Prime Minister George Papandreou was more optimistic: “We now have a package for a sustainable solution for Greece,” he said in Brussels. “This is a European success.”
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