The Straits Times
Published on Nov 27, 2012

Euro zone, IMF reach deal on cutting long-term Greek debt


BRUSSELS (REUTERS) - Euro zone finance ministers and the International Monetary Fund clinched agreement on a new debt target for Greece on Monday in a breakthrough towards releasing an urgently needed tranche of loans to the near-bankrupt economy, officials said.

After nearly 10 hours of talks at their third meeting on the issue in as many weeks, Greece's international lenders agreed to reduce Greek debt by 40 billion euros (S$63.4 billion), cutting it to 124 per cent of gross domestic product by 2020, via a package of steps.

The deal should open the way for a major aid instalment needed to recapitalise Greece's teetering banks and enable the government to pay wages, pensions and suppliers in December.

Greece could receive up to 44 billion euros, although it remains unclear if the full amount will be paid in one go.