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Markets rise on eurozone's Greece aid deal
World stock markets rise after European agreement on second Greek bailout, to help the country avert financial meltdown.
Last Modified: 22 Jul 2011 10:14

Al Jazeera's Jonah Hull, reporting from Brussels, discusses the details of the second bailout package for Greece

British, French and German stock markets gain signficantly in early trading on Friday, while Japan's Nikkei closes up 1.2 per cent.

The gains came after eurozone leaders agreed at a crucial summit on Thursday to find a way out for Greece to manage its debt crisis.

Together with the International Monetary Fund, eurozone countries agreed to give Greece a second bailout worth 109bn euros ($156bn).

Banks and other private investors will also contribute about 37bn euros ($53bn) to the rescue package. The new bailout will supplement the $146bn rescue plan for Greece launched in May last year.

One key element of the package is an expansion of the role of the European bailout mechanism, the European Financial Stability Facility (EFSF), so it can act more freely.

The summit in Brussels was also attempting to stop the debt crisis from engulfing larger countries like Spain or Italy.

"Today we reached three important decisions fully supported by all of us, we improved Greek debt sustainability, we took measures to stop the risk of contagion and finally we committed to improve the euro zone's crisis management," Herman Van Rompuy, the European Council president, said on Thursday.

'Determined commitment'

"We have decided to support Greece as a member of the euro and the eurozone. It is a determined commitment," Nicolas Sarkozy, the French president, said as leaders emerged from the summit.

"All the euro countries have decided to be at its side."

The Greek prime minister, George Papandreou welcomed the agreement, saying: "We now have a programme and a package of decisions which create a sustainable path for Greece, a sustainable debt management for Greece."

Greece will adopt the measures involved as it will be in their interests, Al Jazeera's Jonah Hull says, ''Greece will be able to deliver the loans more widely and cheaper.'

Commenting on Thursday's agreement, Jose Manuel Barroso, the head of the European Commission, said "this is the first time since the beginning of this crisis that we can say the politics and the markets are coming together, we have now a very credible package".

Source:
Al Jazeera and agencies
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