Eurozone leaders offer Greece lifeline with default risk

22.07.2011 [12:53]
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Baku, July 22 (AZERTAC). Eurozone leaders offered Greece some respite Thursday from its crippling debt burden while warning Athens could still face a dramatic default as they battled to prevent the debt crisis from spreading.

The eurozone will provide Greece fresh loans, take steps to reduce the country`s 350-billion-euro debt and open the door for the private sector to contribute to a second bailout, according to a draft agreement.

The 17-nation bloc will also offer Greece and two other bailed out nations, Portugal and Ireland, loans on improved terms, with lower interest rates and lengthier maturities, according to the draft.

Diplomats told AFP the eurozone and IMF were considering providing rescue aid worth 71 billion euros ($101 billion), not including a possible contribution from the private finance sector. The draft text did not specify a sum.

News of the draft gave the euro strong bounce just hours after it sank on a warning that Greece could face some form of default under the new rescue package.

“We cannot exclude any possibility and everything should be done to prevent [a default],” Luxembourg Prime Minister Jean-Claude Juncker, head of the Eurogroup of finance ministers, said on arrival for the Brussels summit.

Eurozone leaders offer Greece lifeline with default risk

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