European Ministers Agree to Loan Greece Another $172 Billion

24 February 2012

Greek Prime Minister Lucas Papademos, right, and Finance Minister Evangelos Venizelos after a meeting of euro-area finance ministers in Brussels

This is the VOA Special English Economics Report.

European finance ministers agreed to loan Greece about one hundred seventy-two billion dollars this week at a meeting in Brussels. Luxembourg's Prime Minister, Jean-Claude Juncker, announced the agreement on Tuesday.

JEAN-CLAUDE JUNCKER: “After a meeting of at least, I think, thirteen or fourteen hours, we have reached a far-reaching agreement on Greece’s new program and private sector involvement that will lead to a very significant debt reduction for Greece.”

Under the plan, Greece’s private creditors will lose more than half of the face value of their investments. The agreement also means the country will receive its second financial rescue in less than two years.

The new loans will likely let the Greek government make a nineteen billion dollar payment on its debt by March twentieth.

Now, Greece must negotiate the terms of its loans with individual banks and other investors. But these creditors will have to hurry. Greece can dictate its own terms once it reaches agreement with two thirds of its creditors.

Not everyone believes Greece will be able to repay its loans. The Fitch financial services company cut the credit rating of Greece on Wednesday. Fitch said, it remains "highly likely" the country will fail to meet its financial responsibilities.