The leaders of eurozone countries decided at a meeting in Brussels that the repayment period for Greece?s 110-billion-euro loan package should be extended and that the interest rate should be lowered.
It was announced early on Saturday that Greece would have 7.5 rather than 3 years to repay the 100 billion euros, and that the interest rate would be an average of 4.2 percent rather than 5.2.
Prime Minister George Papandreou said these adjustments would lighten the debt load on the Greek people. He also hailed the outcome of the eurozone leader?s meeting as a success for the efforts made by the Greek people and the government to convince its partners that its loan terms should be improved.
?We fought, we struggled and we made it,? said the prime minister. ?Today?s decisions are a clear indication of the appreciation for the effort being made by the Greek people,? said Papandreou.
?We won this battle by using seriousness and trustworthiness as our weapons. We want to ensure that our country continues to stick by the program [of reforms] that we have agreed.
Papandreou said that the improvement in the loan terms would make Greece ?more than 6 billion euros better off?.
Contrary to early reports, Greece will not have to rewrite its constitution to include a ?debt brake? – binding all governments to maintaining public debt below a certain level ? said the premier.
He also rejected earlier reports that, under pressure from German Chancellor Angela Merkel, Athens was forced to commit to privatize 50 billions worth of state assets by 2015. He insisted that the privatization program would take place but in a manner to be decided by the Greek government and nobody else.
Papandreou also hailed the decision to increase the capacity of the European Financial Stability Facility from 440 billion euros to 500 billion euros when it becomes a permanent structure in 2013 and to give it the right to buy bonds directly from governments even though it seems the green light was not given for the financing of bond buybacks, which Greece had been hoping for.
?We have a shield against the appetites of the markets,? Papandreou said of the fund.