Euro zone finance ministers and the International Monetary Fund clinched agreement on reducing Greece’s debt on Monday in a breakthrough to release urgently needed loans to keep the near-bankrupt economy afloat.
After 12 hours of talks at their third meeting in as many weeks, Greece’s international lenders agreed on a package of measures to reduce Greek debt by €40 billion, cutting it to 124% of gross domestic product by 2020.
In a significant new pledge, ministers committed to taking further steps to lower Greece’s debt to “significantly below 110%” in 2022.
To reduce the debt pile, they agreed to cut the interest rate on official loans, extend their maturity by 15 years to 30 years, and grant Athens a 10-year interest repayment deferral.
European shares climbed to near a three-week high and safe haven German bonds fell on Tuesday after the deal.
On the currency markets, the euro hit $1.3010, its highest level since October 31 during Asian trading but lost momentum and was 0.3% down at $1.29445 by mid-morning in Europe.