Story Excerpt:
(NBC News) After months of tough negotiating, Europe and the International Monetary Fund sealed a deal early Tuesday to hand Greece €130 billion ($170 billion) in additional bailout loans to save it from a default that threatened the viability of the euro, undermining global economic confidence.
The early-hours agreement to avert default comes after negotiators persuaded private bondholders to take greater losses and Athens to commit to very severe austerity measures.
Ministers finalized measures to cut Greece’s debt to 120.5 percent of gross domestic product by 2020, a fraction above the target, to secure its second rescue in less than two years and meet a bond repayment next month.
The eurozone and the IMF, which will be providing the money for the new bailout, hope the new program will eventually put Greece back into a position where it can survive without external support and secure its place in the euro currency union. Finance ministers from Greece and the other 16 euro countries meeting in Brussels wrangled until the early morning hours over how that could be achieved.
On top of the new rescue loans, Athens will also ask banks and other investment funds to forgive it some €107 billion in debt, while the European Central Bank and other national central banks in the eurozone will forgo profits on their holdings.
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