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Eurozone Leaders Begin Debt Crisis Talks

Service : Economy
TEHRAN, July 21 (ICANA) – Eurozone leaders have begun an emergency meeting in Brussels to agree further help for Greece amid fears that the debt crisis could spread to other euro zone countries.
Thursday, July 21, 2011 11:38:53 PM
Eurozone Leaders Begin Debt Crisis Talks

The meeting comes a day after German Chancellor Angela Merkel and French President Nicolas Sarkozy reached a common position on an aid package for Greece to help it avoid default on its debts, but details of the deal have not been released.

According to a draft agreement, which was put on the table for the European bloc's 17 leaders, the eurozone will provide loans with lower interest rates and longer maturities to countries in financial trouble such as Greece, Portugal and Ireland.

The loans would be extended from 7.5 years to 15 years while the rates would be lowered from 4.5 percent to 3.5 percent.

Germany and France are the two countries most exposed to the Greek debt.

The eurozone plunged into a financial crisis in early 2010, as the specter of insolvency threatened heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland and Spain.

The EU and the International Monetary Fund granted a EUR 110 billion (USD 158-billion) bailout to Greece in 2010 in return for tough austerity measures.

The measures, which included the cutting of public sector salary and pensions, increasing taxes and overhauling the pension system, sparked nationwide protests in Greece.

The protests turned violent at times, leaving scores of protesters and security forces injured.

On Wednesday, the president of the European Commission urged EU leaders to come up with a realistic plan to fight the debt crisis plaguing eurozone countries.

“Nobody should be under any illusion that the situation is very serious and without a decisive response, the negative consequences would be felt in all corners of Europe and beyond,” Jose Manuel Barroso said.

The EU debt crisis continues to undermine confidence in global markets, and gone as far as even to jeopardize the existence of the euro itself.

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