Greece set to get $172 Billion in second bailout

After more than 12-hour long meeting that stretched till Tuesday early hours, Eurogroup Finance ministers are all set to declare a whopping €130 billon (equivalent to 170 billion dollars) towards Greece’s second bailout. It is believed that the bailout amount would help Greece in avoiding short-term default and also bringing down its debt to sustainable 120.5 percent of GDP (gross domestic product) by 2020.

Though the final details of the deal is yet to be released, it has been reported that the private investors of Greek government bonds have finally accepted loss exceeding 50 percent (on face value). It is estimated that the loss on bond face value could go up to 53 percent, bringing total loss to up to 75 percent for private investors.

Currently the economy of Greece is into its five long years of recession. Its sovereign debt is at 160% of GDP. Since approving the latest austerity pact by the parliament, the country has seen some of the worst protests in recent months. While doubts still remain about how stringent rate cuts would address the long term issue of debt crisis, Eurozone leaders would be relieved that the money would help Greece in staving off immediate crisis.