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Greece: IMF, EU agree on new debt target

Euro zone officials and the International Monetary Fund have reached a deal on a new debt target for Greece.

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The EU and Greek flags fly in front of the Parthenon in Athens, Greece on February 17, 2012. ( Oli Scarff/Getty Images)

After almost 12 hours of talks for the third time in two weeks, euro zone officials and the International Monetary Fund have reached a deal on a new debt target for Greece, the Guardian reported.

The officials said they would reduce Greece's debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020, Reuters reported.

According to Reuters:

"The deal should open the way for a major aid installment needed to recapitalize Greece's teetering banks and enable the government to pay wages, pensions and suppliers in December."

Greece is desperate to get its next installment of bailout loans, totaling 44 billion euros ($57 billion), from the European Central Bank, IMF and the European Commission, the Associated Press reported.

To reduce Greece’s debt, the finance ministers said they would lower the interest rate on loans to Greece, buy back debt and send Greece 11 billion euros in profits from European Central Bank purchases of Greek government bonds on the secondary market, Reuters reported.

The agreement “will certainly reduce the uncertainty and strengthen confidence in Europe and in Greece,” Mario Draghi, President of the European Central Bank, said, according to the AP.

More from GlobalPost: Greece trapped in the middle of IMF, EU dispute, no end in sight
 

http://www.globalpost.com/dispatch/news/regions/europe/121126/greece-imf-eu-deal-new-debt-target-bailout