Greece secures bailout to avoid debt default

After more than 12 hours of talks, the countries that use the euro reached an agreement early Tuesday to hand Greece 130 billion ($170 billion) in additional bailout loans to save it from a potentially disastrous default next month.     

The Eurozone and the International Monetary Fund, 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 ($142 billion) in debt, while the European Central Bank and other national central banks in the Eurozone will forgo profits on their holdings.     

The accord, which had been months in the making, seeks to reduce Greece's massive debts on all fronts, with both private and official creditors going beyond what they had said was possible in the past.    

But despite those unprecedented efforts, it was clear that Greece, which kicked off Europe's debt crisis two years ago, was at the very best starting on a long and painful road to recovery. At the worst, the new program would push the country even deeper into recession and see it default on its debts further down the line.  

AP