Merkel pleased by euro debt solution
The Local · 27 Oct 2011, 07:23
Published: 27 Oct 2011 07:23 GMT+02:00
“I’m very pleased with the results,” Merkel said after marathon talks in Brussels, adding that European officials had “done the right things for the eurozone.”
Greece's Prime Minister George Papandreou hailed "a new era, a new chapter" for his debt-strapped nation.
IMF chief Christine Lagarde also voiced satisfaction with what she called "significant progress" on Eurozone financial crisis issues.
"I welcome the steps taken today by the eurozone leaders toward establishing a comprehensive framework to address the crisis facing the region, and I am encouraged by the substantial progress made on a number of fronts," she said in a statement released in Brussels.
The Institute of International Finance welcomed a "comprehensive package of measures to stabilize Europe, to strengthen the European banking system and to support Greece's reform effort."
"We welcome the announcement by the leaders of the Euro Area," said Charles Dallara, managing director of the Washington-based global association of financial institutions.
The talks in Brussels included leaders of the eurozone and representatives of banks, which have been forced to share the pain of Greece's debt burden.
Merkel said negotiations with the bankers had been difficult, but that they capitulated after being given a final offer.
That agreement was the last and perhaps toughest chapter to negotiate in a wide-ranging four-point plan to find a lasting solution to Europe's festering debt crisis.
Convincing banks to erase billions in Greek debt was a key part of a grand deal leaders had pledged to deliver at a eurozone summit, along with a bank recapitalisation plan and a beefed-up rescue fund to soothe fears of a global recession.
The banks had agreed to take a 21-percent "haircut" on the Greek bond holdings as part of a second bailout for Athens agreed at a July summit, but the economic situation has deteriorated since then.
The "haircut" will slice off more than €100 billion from Greece's €350 billion debt.