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Greece to get 100 bn euros in new bailout plan

The eurozone and the International Monetary Fund (IMF) will give debt-burdened Greece another 100 billion euros to help stabilise its economy, EU President Herman Van Rompuy said Thursday. Speaking after an emergency summit of EU leaders in Brussels, Rompuy said a deal had been reached with private creditors to write off 50 percent of Greece?s debt, which could make the country's debt burden sustainable.

Rompuy said the new deal will reduce Greece\'s debt to 120 percent of its GDP in 2020, while under current conditions it would have grown to 180 percent.

In July, the eurozone leaders agreed a rescue package for debt-stricken Greece. The plan proposed providing an extra 109 billion euros of government money, plus a substantial contribution from private sector bondholders, as a supplement to a 110-billion euro bailout for the country launched by the European Union and the IMF.

Private investors were expected to write off 21 percent of Greek debt, but further write-offs became necessary in August, when the Greek crisis escalated.

Some analysts have said private investors should increase debt write-offs to 40-60 percent, the other arguing that this would not help Greece overcome the crisis and Greece's 'managed default' is inevitable.

Greek debt currently stands at 360 billion euros but keeps increasing due to short-term borrowing.

Thursday, October 27, 2011