Brussels - Eurozone finance ministers have approved a second bailout deal for debt-laden Greece, averting its imminent default and temporarily putting an end to months of uncertainty that had overshadowed the Eurozone, Eurogroup chief Jean-Claude Juncker said on Tuesday.
"After a meeting of at least 13 hours, we have reached a far-reaching agreement on Greece's new programme and private sector involvement (PSI) that would lead to a significant debt reduction for Greece," Juncker said at a press conference after a prolonged meeting of Eurozone finance ministers.
The bailout plan is estimated to amount to 130 billion euro (about 172 billion US dollars) until 2014, aiming to bring down Greece's debt-to-GDP ratio to 120.5 % by 2020 from the current 160%, Juncker told reporters.
"Greece will launch a bond exchange offer in coming days, and given the balanced agreement reached with the creditor group led by the IIF [Institute of International Finance] and the fact that the package delivers debt sustainability for Greece, we expect a high participation rate," he added.
This second bailout package, designed by the "troika" of the International Monetary Fund, European Union and European Central Bank, will enable Greece to repay bonds of 14.5 billion euros (about 19.2 billion dollars), which is due on March 20, avoiding a default and a potential exit from the European single currency zone.
Private sector holders of Greek debt were expected to accept a reduction of 53.5% on the face value of their bonds as part of a debt exchange that involves about 200 billion euros (265 billion dollars), Juncker said.
The real losses of private Greek bondholders are expected to be deeper than the previous 70%, when they were offered a 50% haircut on their Greek bonds, analysts said.
