Eurozone finance ministers have approved a new $172-billion bailout for Greece, the second for the debt-ridden country in two years. The financial-rescue package could reduce the Greek government debt from about 160 percent of the country's economic output to just more than 120 percent by 2020 - the maximum debt level considered sustainable by the International Monetary Fund. It also likely averts a Greek default next month on $19 billion in financial obligations, although the country faces years of austere spending.
With its previous $145-billion bailout, Greece is now by far the biggest recipient of international aid in the 13-year history of the 17-nation bloc that uses the euro. Yet Greece accounts for just two percent of the eurozone economy. Greek Prime Minister Lucas Papademos called the pact "historic" and said it gives his country a new opportunity to advance its economy. The deal was reached after 13 hours of negotiations in Brussels. Greece's large private creditors agreed to take on a bigger-than-expected 53.5-percent face-value loss on their bonds. More than $141 billion of Greece's debt will be erased.