Euro zone nations and IMF in €110bn Greece bailout

A deal designed to prevent Greece from defaulting on its massive debt has been agreed over the weekend.

It is also hoped the €110 billion (£95 billion) three-year rescue package will strengthen the single currency, which has been plummeting over recent months as a result of Greece’s debt crisis.

The EU will provide €80 billion with the rest coming from the International Monetary Fund (IMF).

The first instalment of the bailout will be paid within the next few weeks, with the remainder spread over three years.

However, in return for the funding, Greece will undertake austerity measures which, according to Prime Minister George Papandreou, involve “great sacrifices” and will see further tax hikes and deeper cuts in pensions and public service pay.

However, Unions have pledged to fight the round of austerity measures with the third nationwide general strike in as many months scheduled for later this week.

Greece’s economy, which is still in recession, has a national debt the equivalent of around 115% of GDP and is expected to rise to 149% by 2013.

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