Europe agrees on new package to save Greece.

247_Finally, saved. That must have been the sigh that the main leaders of Europe let out after the approval of the new package to save the Greek economy, which was in danger of spreading the powder keg of crisis across the Continent. In this second rescue plan, 109 billion euros will be transferred to the Greeks. The novelty is the participation of the private sector, which will bear 34% of the resources. The decision was taken at a meeting in Brussels by Angela Merkel, of Germany; Nicolas Sarkozy, of France; George A. Papandreou, of Greece; Christine Lagarde, of the IMF; among other leaders of the European Union.

This second bailout package is very similar to the first one of 110 billion euros, approved in May of last year. The difference is the participation of the private sector, which, for credit rating agencies, can be considered a moratorium on the country's debt, that is, a postponement of payment. According to the rules created by these institutions, financial assistance with the help of private banks can be considered a default. This means that Greece's rating could be reviewed. Sarkozy defended the position of European leaders and said that nobody uses the words default, moratorium, or partial default for what was done with the Greeks. The French president even considered the possibility of Europe creating its own credit rating agency.

The situation in Greece had been worrying economies worldwide. With a debt of 350 billion euros, a Greek crisis could drag other countries on the continent into a severe recession. Last week, nearly 30 private banks in Europe sounded the alarm after a stress test. If the situation got out of control, systemic risk would be inevitable. Now, the approved bailout will reduce Greece's debt by about 12 percentage points and create conditions for the country to emerge from its precarious situation in the long term. The loan's interest rate will be between 3,5% and 4% per year. And the repayment term will be 15 years, with the possibility of extension to 30 years.

"This program will be aimed, primarily through interest rate reductions and extended maturities, at decisively improving the sustainability of Greece's debt and its refinancing profile," says the statement jointly signed by the European Union, the European Central Bank (ECB), and the International Monetary Fund (IMF). "We will closely monitor the strict implementation of the program based on regular assessments by the Commission, in conjunction with the ECB and the IMF."

With Greece's finances balanced, attention turns to Portugal and Ireland, which recently received aid from the IMF and the European Union. It is expected that these two countries will be able to alleviate the pressure that existed on their economies.