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Stock Markets Rise After New Aid Package to Greece

After the Eurozone reached an agreement to help resolve the debt crisis in Greece, Stock Markets have made positive movements upwards.

Increases in the UK’s FTSE, Germany’s DAX and France’s CAC gained more than 0.5% in early trading with Japan’s Nikkei up an impressive 1.2%. Furthermore, increases were seen on the Euro against the dollar.

Eurozone leaders have a greed to provide a further 109 billion euros ($155bn, £96.3bn) financial aid package to Greece. Private lenders have also agreed to contribute towards the package which sees Greece given decades more to repay the debt.

Shares in banks also continued to rise after seeing sharp gains on Thursday as the Royal Bank of Scotland, Barclays and Credit Agrcole (France) were all up more than 3%.

Mark Rutte, the Dutch Prime Minister said:

“We have sent a clear signal to the markets by showing our determination to stem the crisis and turn the tide in Greece, thereby securing the future of the savings, pensions and jobs of our citizens all over Europe.”

The 109 billion-euro package includes:

  • Various options to extend Greece’s repayment terms and reduce the amount it repays.
  • Voluntary private sector participation in these options, so that banks share taxpayers’ burden.
  • Doubling the length of repayment terms for the Irish Republic and Portugal, both of which have received financial assistance previously.
  • Additional powers granted to the European Financial Stability Facility to buy up bonds and to make credit available to countries such as Spain and Italy that are not at immediate risk of insolvency.
  • The Institute of International Finance (IIF) – a global trade body representing big banks and other major lenders – said the planned debt restructuring would target participation by 90% of Greece’s private sector lenders.