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Eurozone approves Greek bailout package -

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Markets have responded positively to a European bailout package for Greece that includes lower
interest rates and longer repayment periods.


ALI MOORE, PRESENTER: Markets have responded positively to details of a European bailout package
for Greece.

After a marathon meeting today Eurozone leaders approved the new deal, which includes lower
interest rates and longer repayment periods.

Banks and other private lenders will also be asked to contribute to the bailout.

Europe correspondent, Philip Williams, reports.

PHILIP WILLIAMS, REPORTER: After hours of torturous negotiations finally the leaders went home. A
deal done. And one they hoped would do the trick, calm fears of contagion that had the whole
Eurozone and beyond extremely nervous.

HERMAN VAN ROMPUY, EUROPEAN COUNCIL PRESIDENT: We improved the Greek debt sustainability. We took
measures to stop the risk of contagion and finally we committed to improve the Eurozone's crisis

PHILIP WILLIAMS: The markets have given the package a cautious thumbs up, depressed bank stocks led
the way. Encouraged by the package of lower interest rates and extended terms it's hoped this near
$200 billion rescue mark II will work.

JOSE MANUEL BORROSO, EUROPEAN COMMISSION PRESIDENT: We need a credible package, we have a credible
package. It deals with both the concerns of the markets and of citizens. It responds also to the
concerns of all member states.

PHILIP WILLIAMS: Part of the deal involves banks sharing the pain, taking a so-called haircut on
their investments. The ratings agency defined that as a default.

VANESSA TERRODE, LAWYER: Anything which extends the maturity, the repayment date of any loan made
to Greece previously, whether it's a bond or a standard loan, would be a default.

PHILIP WILLIAMS: In the place it all began there is relief.

But for Athens bar owner Manrolos Valrakis (phonetic) there is a long road ahead.

(Manrolos speaking)

"Since the crisis began we're 70 per cent down on profits" he says, "during the last three years
every year has been worse."

And this bread shop owner says he too is having a hard time, his profits down 80 per cent.

But according to the Greek prime minister, conditions would have been a whole lot harder without
the deal.

GEORGE PAPANDREOU, GREEK PRIME MINISTER: We now have a program and a package of decisions which
create a sustainable path for Greece, a sustainable debt management for Greece.

PHILIP WILLIAMS: And it's not just Greece breathing a little easier, both Portugal and Ireland have
had the interest rates on their bailout packages cut. And the vulnerable elephants in the troubled
Euro-room, Spain and Italy, have been given more time to get their respective books in better

While no-one believes this is the end of the crisis, the European stabilisation fund has been given
new autonomy to intervene earlier and hopefully prevent Greek-style crises in the future.

Philip Williams, Lateline.