Brussels - eurozone heads of State and Government on Thursday agreed to return, which will provide a massive new bailout Greece - but make it likely the first euro country to standard - and radically new funds, make rescue of Monetary Union so that they to act pre-emptively if crises develop.
Euro-zone countries and the International Monetary Fund Greece is a second rescue mission in the amount of €109 (billion $155), giving more than EUR 110 billion granted a year ago.
Banks and other private investors are of either Greek bonds that hold them, to exchange them for new with lower interest rates or selling bonds overwhelm back after Greece at a low cost some 50 billion euros (71 billion dollars) to the help the bailout.
"For the first time since the beginning of this crisis, we can say that the policy and the markets together, come", said President of the European Commission Jose Manuel Barroso.
The initial reaction of markets and analysts was cautiously positive. Euro, strong on expectation of who together had edged up further to gain 1.2 per cent against the dollar.
The "Summit conclusions surprise by their size and range," Marie Diron, Senior Economic Advisor for Ernst & young, said in a note. "The measures imply a more important and huge support from the EU private sector." "Serve all politically acceptable measures."
The euro zone is secure any new Greek bonds to banks with guarantees, if business "selective default" is seen by rating agencies, which in General is expected. If the agencies make true their warning, Greece will be the first euro country to ever in default - probably only for a short period of time.
Agreements provide new Greek debt guaranteed helps one of the largest obstacles contribution of the private sector to the to overcome the new Greek bailout. It means that the Greek banks continue to can the European Central Bank liquidity. Without this support quickly Greek banks would collapse.
In the bond-rollover or swaps, the new Greek bonds to banks would long durations of up to 30 years and low prices, according to the Institute of international finance, the group that have private sector creditors. The French President Nicolas Sarkozy estimated that prices would average 4.5 per cent.
Heads of Government agreed also the new eurozone rescue loans with an interest rate of 3.5 percent and an average maturity of at least 15 years of Greece type. The maturities up to 30 years and have an additional grace period of 10 years.
"I think this is extremely important, ensure the Greece debt sustainability," said Barroso.
In addition to the new aid for Greece reconditioned the heads of State and Government also their bailout Fund gives him which makes countries intervene before they are in the fully hits crisis mode.
The changes are a big change, especially for Germany, which had blocked such a move this year. You show how the euro area is concerned, that the debt crisis from small countries such as Greece, Ireland and Portugal to large as Spain or Italy could spill over. The financial capacity of the Eurozones would probably overwhelm full rescue operations for these countries.
To avoid that she ever in this position, the EFSF a "precautionary principle program," can offer for struggling countries such as short-term lines of credit. These credit lines could be very useful for Italy and Spain, if they ever experienced a funding squeeze, whereby investors support is available, if it will work closely.
She could start also makes it easy to Ireland and Portugal money again on the financial markets increase, once run out their own recovery programmes.
The EFSF will not support yet they recapitalisation of banks in countries which was rescued, able, during a banking crisis without in a complete program, typically massive cuts and economic reforms required to force that. This can make it easier for some to contact countries before market panic has reached its peak.
On top of that, an investor sell-off pressure can pull out the eurozone under certain circumstances which experience EFSF bonds in the secondary market, countries buy. This was a role that had reluctantly, fulfills the ECB until a few months ago when it his bond purchase program in the midst of growing frustration with heads of State and Government slowly include efforts to the crisis gave up.
Heads of State and Government said, Portugal and Greece get even lower interest rates on its bailout loans, but stressed that there will be involvement of the private sector in their support programmes not.
"Participation of the private sector Greece and Greece is only limited," said EU President Herman van Rompuy.
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Don Melvin, David McHugh, and Sylvie Corbet contributed to this article.
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