Greece is to spend 10 billion euros to buy back government bonds, offering a better deal than investors had feared.
The move is part of efforts to reduce the country’s massive debt load. That would then unlock long-delayed international aid needed by Athens so it does not run out of cash.
This is one of the measures approved by eurozone finance ministers last week as Greece’s foreign lenders try to put the near-bankrupt country’s debt back on a sustainable footing.
Athens will only pay around a third of the original value of the bonds, saving it 20 billion euros.
It remains to be seen how much of a take up there will be – particularly among non-Greek bond-holders – but it did find favour on Athens streets.
One man said: “It is a small relief, because there should have been a general reduction in the debt. That would be fair”
Another added: “The Eurogroup decision is, indeed, very important and can provide a way out of the Greek problem. The point is that this way out is not in the near future. There is a long way to go for Greece to get out of the recession.”
The percentage that the government is offering to pay varies, but is more than the calculated value of those bonds last week when the buyback was announced.
That led to a rally in Greek bond prices and shares of the country’s banks rose as they will not lose as much as previously feared.