The Euro zone countries have agreed to provide Greece with a second bailout valued at 135-billion euros (about $194-billion) over the next thirty years.
For the first time, the financing will include private lenders – a step that Germany had long advocated, but which was opposed by France and the European Central Bank.
At a summit in Brussels over ways to tackle Greece’s monumental
debt crisis, leaders of the two most powerful European nations, Nicolas Sarkozy of France and Angela Merkel of Germany, reportedly hammered out pact prior to the official meeting.
Greece already received a massive aid 110-billion euro package from the EU and IMF last May, but concerns had risen that the Athens had not implemented enough austerity measures to get its debt problems under control.
In addition, the European bailout mechanism, the European Financial Stability Facility (EFSF) will be expanded to give it more leverage and flexibility.
Herman Van Rompuy, president of the European Council, said in a statement: Reform of the EFSF will make it more flexible and effective. We do not now have to wait for substantial damage to occur before we can intervene.