![The [Greek] European Tragedy](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWKI5s90SFm1wWTk6bs4p7CgslaC2SnYPsrZhb-B-smOufNNCSxCvpBLI9hOB-LsXZjir_PNmEiMk2-E62F3xkg96IoC6QFAaZAnPRTVH340IN9WBRmWJqPkjWlgyRj3zpALp7h6hvA58/s920/GkBack_new.jpg)
Tuesday November 27, 2012
Greece has won big breathing space with long-frozen eurozone loans to restart from December and a first clear admission that a chunk of the country's debt burden will need to be written off down the line.
After 13 hours of talks in Brussels, the eurozone and the International Monetary Fund agreed to unlock 43.7 billion euros ($A54.63 billion) in loans and grant significant debt relief going forward for decades to come.
Greece must still meet a series of agreed conditions but 'the decision will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece', said European Central Bank President Mario Draghi, who left the talks before a final.
Starved of bailout financing since the summer, Greek Prime Minister Antonis Samaras hailed the deal in Athens, while German Finance Minister Wolfgang Schaeuble said the package would be presented to German MPs by the end of the week.
'Everything has gone well,' Samaras told reporters in Athens.
'All Greeks have fought (for this decision) and tomorrow is a new day for every Greek person,' he added.
Finance ministers, the IMF and the ECB said the money would be paid in four instalments from December 13 through until the end of March, conditional on Greece funnelling income back to creditors at source and on the implementation by Athens of tax reforms settled with creditors.
The results of the 'laborious' negotiations according to IMF head Christine Lagarde are intended to see Greece's debt-to-GDP ratio fall from an estimated 144 per cent to 124 per cent come 2020, and 'substantially below 110 per cent' of gross domestic product by 2022.
'The IMF wanted to make sure the euro partners would take the necessary actions to bring Greece's debt on a sustainable path,' said Lagarde. 'I can say today that it has been achieved.'
There will be a mixture of techniques used to bring down Greece's debt burden.
These will begin with a buyback by Greece of old debt that has fallen in value on commercial money markets as well as national central banks across the eurozone foregoing profits on holdings of Greek debt whose worth has slumped.
Interest rates due to eurozone creditors will also be trimmed or deferred -- Ireland and Portugal can now be expected to demand parity -- while maturity dates will be pushed back by years.
The original bailout rewrite agreed for Greece in March was meant to see Greece's debt fall to 120 per cent of gross domestic product by 2020.
'Greece has delivered, now it's delivery time for the Eurogroup and the IMF,' said Rehn.
The IMF is pushing for a so-called 'haircut' or write-down of debt by eurozone partner governments in the way banks wrote off most of the loans due to them earlier this year, but Germany has come out against this ahead of a general election next year.
Other Triple A-rated states, though, have said they would 'not exclude' the possibility of a write-down of debt from 2015 onwards.
France has long been a firm backer of all efforts to keep Greece in the eurozone club, and having lost its Triple-A status, Finance Minister Pierre Moscovici said: 'Let's assume our responsibilities.'
Greece has been waiting since June for a loan instalment of 31.2 billion euros, part of a 130-billion-euro rescue granted earlier this year.
In exchange, Athens has pledged to implement a new series of radical austerity measures to cut its annual overspending.
Samaras' government pushed a fresh batch of deeply unpopular cuts through parliament earlier this month.
Greece's public creditors have decided to give Greece an extra two years, until 2016, to balance the books.
Greece's private creditors have written off more than 100 billion euros in debt, and the IMF has urged the ECB to accept this solution.
But both the central bank and Germany have so far held out against making any similar move, saying it would violate EU mandates against bankrolling individual countries.
German Chancellor Angela Merkel has said she is 'against this debt write-off and I want to find another solution'.
