European finance ministers have hammered out a new finance deal with Greece that will see the country receive a £108.7 billion rescue package from the eurozone.
The deal will come just in time to avert a default in the debt stricken nation, however, the deal is unlikely to be popular with the people as it requires the Greek government to get on top of its finances by implementing far-reaching austerity measures.
Ministers agreed the deal after 13 hours of talks. Targets include the reduction of Athens' debt to 120.5 per cent of the country's gross domestic product (GDP) by 2020.
Speaking after the agreement was finalised, Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, said: "We have reached a far-reaching agreement on Greece's new programme and private sector involvement that would lead to a significant debt reduction for Greece … to secure Greece's future in the euro area."
The deal buoyed some European investors. However, others were concerned that the bailout and Greece's guaranteed position in the eurozone could jeopardise economic recovery on the continent.
David Miller, partner at Chevoit, told Reuters: "The deal in addition to the long term refinancing operation, and creation of the EFSF are steps towards eurozone stability, but none are more than temporary fixes."
"The lack of economic growth in peripheral Europe and structural imbalances are slowly being mixed into the crisis," he added.
The deal did have a better impact further afield, with investors in Australia welcoming the eurozone bailout deal. The S&P/ASX200 index in Sydney climbed by 35.1 points following the announcement.
John Curtin, associate director with Patersons Securities, told the Sydney Morning Herald: ''The positive is that they've got the deal done – unlike other deals – earlier than when the deadline was. So, that's going to be good for confidence."
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