By TOM NEWTON DUNN, Political Editor
and STEVE HAWKES, Business Editor
Published: Today
Add a comment Add a comment (24)
ECONOMIC meltdown was narrowly averted last night as Eurozone leaders agreed another £96billion bailout for bankrupt Greece.
The emergency summit in Brussels also decided to give the Athens government more time to pay back bailout cash - and cut the interest rate from 4.5 per cent to 3.5.
And for the first time, banks and other private investors will contribute to the package.
The deal was hammered out at a nine-hour session - and comes 14 months after Greece, which is more than £300billion in debt, was given its first £100billion cash injection.
It will now be asked to repay over 15 years - twice as long as the initial term. The private sector will contribute £32.5billion to the bailout.
Click to enlarge ... toxic Europe
Enlarge
Click to enlarge ... toxic Europe
spacer
But this time Brussels may demand the nation's major assets as collateral, including its airports and state-owned power and water companies.
Greeks fear their famous ancient sites such as the Acropolis, home of the Parthenon temple, and even some holiday islands like Corfu, could end up in foreign ownership.
The rescue package was agreed by the leaders of all 17 nations that took the Euro as their national currency, including French president Nicolas Sarkozy and German Chancellor Angela Merkel.
EU taxpayers will fund a large part of the deal - with the Germans and the French taking the biggest hit. But Britain will play no part.
Cautious ... George Osborne
Cautious ... George Osborne
The leaders said in a joint statement: "We agree to support a new programme for Greece and, together with the IMF and the voluntary contribution of the private sector, to fully cover the financing gap."
The Eurozone bailout fund was also expanded to set aside extra billions for future crises.
And Ireland and Portugal, whose economies have needed bailouts too, were also offered reduced interest rates and longer settlement terms. But those countries will have no private sector involvement.
The Greek deal was expected to soothe the jittery nerves of stock markets. Share prices rose before the deal was announced simply on news an agreement was thought to be likely.
Chancellor George Osborne gave the package a cautious welcome, calling it an "important and positive development. He added: "Even more positive is the demonstration that eurozone political leaders can take decisive economic action. That is what they now have to sustain."
Deal ... Herman Van Rompuy
Deal ... Herman Van Rompuy
Many experts last night said the package was merely a "sticking plaster" and did not address the fact that Greece was bankrupt. Dr Eamonn Butler, of the influential Adam Smith Institute, added: "Too many euro-area countries are overspending wildly and are deep in debt. The only lasting solution is to leave the euro and balance their books."
The summit was called because Eurozone leaders are desperate to stop the crisis spreading to Italy and Spain, which are also deeply in debt.
The risk of Greece defaulting on its debt have made money markets extremely nervous - and that has pushed up the cost of borrowing for both Italy and Spain. Experts feared this could push their much larger economies over the edge and risk triggering a Europe-wide recession.
President of the European Council Herman Van Rompuy said: "Convening this meeting focused the minds and accelerated finding a solution. I could not allow a difficult situation to become a dangerous one."
t.newtondunn@the-sun.co.uk
Read more: http://www.thesun.co.uk/sol/homepage/news/money/3708927/Bankrupt-Greece-could-have-to-mortgage-its-famous-ancient-sites-such-as-the-Acropolis-under-a-new-96billion-bailout-agreed-yesterday.html#ixzz1SpumIT1R
and STEVE HAWKES, Business Editor
Published: Today
Add a comment Add a comment (24)
ECONOMIC meltdown was narrowly averted last night as Eurozone leaders agreed another £96billion bailout for bankrupt Greece.
The emergency summit in Brussels also decided to give the Athens government more time to pay back bailout cash - and cut the interest rate from 4.5 per cent to 3.5.
And for the first time, banks and other private investors will contribute to the package.
The deal was hammered out at a nine-hour session - and comes 14 months after Greece, which is more than £300billion in debt, was given its first £100billion cash injection.
It will now be asked to repay over 15 years - twice as long as the initial term. The private sector will contribute £32.5billion to the bailout.
Click to enlarge ... toxic Europe
Enlarge
Click to enlarge ... toxic Europe
spacer
But this time Brussels may demand the nation's major assets as collateral, including its airports and state-owned power and water companies.
Greeks fear their famous ancient sites such as the Acropolis, home of the Parthenon temple, and even some holiday islands like Corfu, could end up in foreign ownership.
The rescue package was agreed by the leaders of all 17 nations that took the Euro as their national currency, including French president Nicolas Sarkozy and German Chancellor Angela Merkel.
EU taxpayers will fund a large part of the deal - with the Germans and the French taking the biggest hit. But Britain will play no part.
Cautious ... George Osborne
Cautious ... George Osborne
The leaders said in a joint statement: "We agree to support a new programme for Greece and, together with the IMF and the voluntary contribution of the private sector, to fully cover the financing gap."
The Eurozone bailout fund was also expanded to set aside extra billions for future crises.
And Ireland and Portugal, whose economies have needed bailouts too, were also offered reduced interest rates and longer settlement terms. But those countries will have no private sector involvement.
The Greek deal was expected to soothe the jittery nerves of stock markets. Share prices rose before the deal was announced simply on news an agreement was thought to be likely.
Chancellor George Osborne gave the package a cautious welcome, calling it an "important and positive development. He added: "Even more positive is the demonstration that eurozone political leaders can take decisive economic action. That is what they now have to sustain."
Deal ... Herman Van Rompuy
Deal ... Herman Van Rompuy
Many experts last night said the package was merely a "sticking plaster" and did not address the fact that Greece was bankrupt. Dr Eamonn Butler, of the influential Adam Smith Institute, added: "Too many euro-area countries are overspending wildly and are deep in debt. The only lasting solution is to leave the euro and balance their books."
The summit was called because Eurozone leaders are desperate to stop the crisis spreading to Italy and Spain, which are also deeply in debt.
The risk of Greece defaulting on its debt have made money markets extremely nervous - and that has pushed up the cost of borrowing for both Italy and Spain. Experts feared this could push their much larger economies over the edge and risk triggering a Europe-wide recession.
President of the European Council Herman Van Rompuy said: "Convening this meeting focused the minds and accelerated finding a solution. I could not allow a difficult situation to become a dangerous one."
t.newtondunn@the-sun.co.uk
Read more: http://www.thesun.co.uk/sol/homepage/news/money/3708927/Bankrupt-Greece-could-have-to-mortgage-its-famous-ancient-sites-such-as-the-Acropolis-under-a-new-96billion-bailout-agreed-yesterday.html#ixzz1SpumIT1R