Market News
November 27, 2012 @ 11:16 am

Greek debt deal finally concluded by EU-IMF

The long awaited deal on a Greek bailout between European finance ministers and the International Monetary Fund was finally concluded after almost thirteen hours of talks on Monday. This was the third meeting in a month.

A package of measures were agreed upon to reduce Greek debt and disburse the country’s next aid instalment, giving a sigh of relief to markets. The euro rose against the dollar and yen, and European shares climbed as well.

The Asian markets were first to react to the news, with euro gaining as 0.3 percent in the session to peak at $1.3010, its highest level since October 31, before trimming  gains in the European session.

The troika (EU-ECB-IMF) agreed on cutting Greece’s debt-to-GDP ratio, with the aim of reducing it to 124 percent by 2020 from 144 percent.

Also interest on loans will be cut, maturities extended, and there will be an interest “holiday”.

The deal includes a Greek debt buy-back and ECB profits returned.

In the meantime, the much needed loan tranche worth around 34.4 billion-euro ($44.7 billion) will be received by Athens by mid-December, so that the country will avoid going bankrupt.

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