Eurozone finance ministers have reached an agreement on a second bailout for Greece worth 130 billion euros (172 billion dollars), diplomats in Brussels said after more than 12 hours of negotiations.
The euro surged as the news broke, climbing 0.7 percent to $1.328 within minutes. While much depended on the details of the deal, a final agreement on the bailout for Greece will take some pressure off the 17-country currency union, which has been battling a serious debt crisis for two years.
The deal details of which were still being worked out by European finance ministers in an all-night session in Brussels was expected to bring Greece’s debt down to 120.5 percent of gross domestic product by 2020, according to the official. That’s around the maximum that the International Monetary Fund and the euro-zone considered sustainable.
It was unclear what the final deal with bondholder representatives looked like, but the lower debt level suggested that they compromised further. The big question will now be how many banks and other investment funds will actually agree to participated voluntarily and whether Greece will have to force some holdouts to sign up to make the deal effective.
