European leaders agree on steps to reduce Greece's debt
The steps include requiring banks to accept losses of 50% on their Greek bonds, more than double the 21% agreed upon by the Eurozone and private bondholders in July. The deal also involves injecting Europe’s biggest banks with an extra $140 billion to withstand those losses.
European Union President Herman Van Rompuy said the Eurozone and International Monetary Fund, which previously agreed to loans for Greece, would help with an additional $140 billion. The Eurozone will increase its bailout fund to about $1.4 trillion to protect other countries as well, he said.
“These are exceptional measures for exceptional times. Europe must never find itself in this situation again,” European Commission President Jose Manuel Barroso said after the meetings, according to the Associated Press.
French President Nicolas Sarkozy told reporters: “We have reached an agreement which I believe lets us give a credible and ambitious and overall response to the Greek crisis.
-- Times staff and wire reports
Photo: From left, Italian Prime Minister Silvio Berlusconi, Greek Prime Minister George Papandreou and Luxembourgian Prime Minister Jean-Claude Juncker at the EU summit in Brussels. Credit: Olivier Hoslet / EPA