Greece Creditors Agree to New Aid Deal

After weeks of negotiations, the eurogroup, the association of eurozone finance ministers, and the International Monetary Fund have reached a deal to continue providing aid to Greece, the two organizations announced in separate statements.  

The participants agreed that the country's debt should be reduced to below 124% of GDP by 2020, and under 110% by 2022. Greece will be provided with up to 43.7 billion euros ($57 billion) from European institutions in order to help in this effort. The monies will be paid in several installments, provided the Greek government meets certain conditions for the release of each.

The earliest of these should come through in the first half of December. This tranche is seen as critical, since the government is short of funds to pay salaries for public-sector workers, pensions, and payments to suppliers next month. Additionally, it requires funding to recapitalize the country's struggling banks.

This attempt to drive down the deficit will be aided by a package of measures, including a reduction of interest rates and a lengthening of maturities for existing bailout loans to the country, and interest repayment deferrals.

"Taken together, these measures will help to bring back Greece's debt ratio to a sustainable path and facilitate a gradual return to market financing," IMF Managing Director Christine Lagarde was quoted as saying in her organization's statement.

At the moment, Greece's public debt is over 170% of GDP, a figure that could approach 200% within the next two years, according to some estimates.

link


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2128603, ~/Articles/ArticleHandler.aspx, 8/30/2014 6:15:18 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement