Greece secured a second giant bailout early Tuesday in exchange for severe austerity measures and strict conditions. The $172 billion bailout forces private investors to suffer even steeper losses in order to help stop the country’s imminent default. Under the deal, Greece will reduce its debt to about 120.5 percent of its gross domestic product by 2020, from about 160 percent now.
Following several rounds of talks, banks that hold Greek bonds agreed to what, with past agreements, now amounts to a roughly 75 percent loss. At the same time, Greece will pay lower interest rates on its bailout loans.
The deal had been widely anticipated and leaders are hoping the news provides the euro zone with much-needed momentum.