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Eurozone finance ministers approve Greek bailout

Eurozone finance ministers approve Greek bailout

Eurozone finance ministers approve Greek bailout

Eurozone finance ministers have signed off on Greece’s second bailout.

Greece recently swapped its privately held bonds, which paved the way for the ministers to approve a €130bn package.

“As agreed, new official financing of €130bn will be committed by the euro area and the IMF for the period 2012–2014,” said Jean-Claude Juncker, chairman of the Eurogroup of eurozone finance ministers.

Thanks to a high take-up of the bond swap offer, Greece's debt would fall below a target of 120pc of GDP in 2020, reaching 117pc from 160pc now, he added.

Meanwhile the ministers have allowed Spain to inflate its 2012 public deficit to 5.3pc of GDP, which is higher than the original target but lower than what Madrid was asking for, Juncker also explained.

Spain was originally meant to bring its deficit down to 4.4pc of GDP this year, but last month it said it would instead aim for 5.8pc of GDP.

“The figure announced previously by the Spanish government, the figure of 5.8pc, is dead,” Juncker said. “What is far more important is the figure of 3pc by the end of 2013.”

European commissioner Olli Rehn said Madrid had to deliver a credible and convincing path of fiscal consolidation over the coming two years that would run in parallel with economic reforms that can bring sustainable growth and better jobs in Spain.

Karina Corbett