Sunday, March 11, 2012

Threat of Greek default fades but bailout may not be last

BRUSSELS: The dark clouds hanging over the eurozone have receded along with the threat of a Greek default, but the latest bailout for Athens may not be the last.

After nine long months of negotiations, a large majority of Greece's private creditors agreed to a bond swap that will see them accept huge losses and wipe some 100 billion euros ($131 billion) off Athens' debt.

Eurozone finance ministers immediately unblocked part of a second aid package of 130 billion euros and were expected to give final approval to the entire programme at a Monday meeting.

International Monetary Fund chief Christine Lagarde welcomed the debt deal as "an important step that will dramatically reduce Greece's medium-term financing needs and contribute to debt sustainability".

And US Treasury Secretary Timothy Geithner said that thanks to the measures taken by Europe to tamp down the debt crisis, the continent no longer posed major risks to the global economy.

"We are not out of the woods but we have taken an important big step," German Finance Minister Wolfgang Schaeuble said. Read More