Eurozone leaders agree bailout deal for debt-stricken Greece

High level talks in Brussels saw a package worth £96bn agreed to help ease Greece’s financial turmoil and quell growing fears for another financial crisis in the Eurozone.

Softer lending conditions will be applied to Greece, as well as the multi-billion-euro rescue loans for Ireland and Portugal.

Heads of state opted to double the maturity of the loans for the three bailed-out countries from seven-and-a-half years to 15 years and cut the interest rate in an attempt finally to ensure the stability of the single currency.

It is understood that for the first time private lenders will be involved in the bailout while the European bailout mechanism, the European Financial Stability Facility (EFSF), will be expanded.

In a joint statement, the leaders said: “We agree to support a new programme for Greece and, together with the International Monetary Fund and the voluntary contribution of the private sector, to fully cover the financing gap.

“The total official financing will amount to an estimated 109bn euro. This programme will be designed, notably through lower interest rates and extended maturities, to decisively improve the debt sustainability and refinancing profile of Greece.”

Earlier the president of the European Commission, Jose Manuel Barroso, had promised “a good solution for Greece and for all the euro area members”.

Stock markets rallied throughout the eurozone yesterday as the news that a deal was imminent spread.

Some had speculated major economies like Italy and Spain could be affected if a deal was not struck soon.

At home Deputy Prime Minister Nick Clegg warned at a London press conference that Britain had a “vital self-interest” in ensuring stability in the eurozone, warning eurosceptics hoping for the collapse of the single currency to be “careful what you wish for”.