EU Nations signed Agreement with IMF to reduce Greek Debt

The 17 European Union nations on 27 November 2012 signed an agreement with the International Monetary Fund (IMF) in Brussels on a programme to reduce Greek debt and put Greece on the path of financial recovery. The objective of the bailout programme is to revive Greece’s economy and to see how the country’s debt load can be reduced.  The 17 EU nations are those who use Euro as their currency.

EU-17 nations and IMF agreement includes:
• A plan to reduce debt level of Greece to 124 per cent of its GDP by 2020 and below 110 per cent by 2022.
• Cut of 100 basis points on the interest rate charged to Greece by other eurozone member states excluding those that are receiving bailouts.

• Fifteen year extension of the maturities of loans from other nations and the eurozone’s bailout fund, the European Financial Stability Facility, and a deferral of interest payments by Greece on EFSF loans by 10 years.

The European Central Bank, IMF and the European Commission have twice agreed to bail out Greece, pledging a sum total of 240 billion US dollars to Greece of which the latter has got 150 billion US dollars so far. Greece had to impose several rounds of austerity measures and submit its economy to scrutiny in exchange for its bailout loans.Greece is undergoing a period of recession and 25 percent of its workforce are jobless and there have been speculations that it could be dropped out of the eurozone, destabilizing other countries in the process.