(Newser)
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Greece has been awarded a second massive bailout in a deal likely to cause anger on the streets of Athens, but tempered relief in eurozone finance ministries. To avoid a chaotic Greek default, European finance ministers have agreed to a $172 billion loan package. In return, the Greek government has agreed to measures to cut its debt to 120.5% of GDP by 2020, and to accept the "enhanced and permanent" presence of EU monitors overseeing its economy, reports the BBC. Greece's debt currently amounts to some 160% of its GDP.
Banks holding Greek bonds have agreed to take an overall loss of close to 70% of loaned money. The deal will save the eurozone from the knock-on effects of a Greek default, and keep Greece in the foreign currency. But the cuts in public spending involved are expected to worsen the country's recession, now in its fifth year, and Reuters shares a glass-half-empty perspective: According to a "deeply pessimistic" report it obtained, international experts believe the deal will only assist with the country's most immediate debt problems. They paint a picture of an "accident prone" Greece for years to come, and say more assistance will be needed if the country is expected to really cut its debt to the levels set by the bailout. And the Financial Times speaks to experts who insist that a eurozone exit is still likely for Greece in 2012.
