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updated: 12/13/2012 7:14 AM

Euro ministers back next Greece bailout payment

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  • Greece's euro partners agreed Thursday to hand over the next disbursement of the country's bailout loans that will prevent it from going bankrupt and potentially trigger more turmoil in financial markets.

      Greece's euro partners agreed Thursday to hand over the next disbursement of the country's bailout loans that will prevent it from going bankrupt and potentially trigger more turmoil in financial markets.
    Bloomberg News

 
Associated Press

BRUSSELS -- Greece's euro partners agreed Thursday to hand over the next disbursement of the country's bailout loans that will prevent it from going bankrupt and potentially trigger more turmoil in financial markets.

The cash-strapped country will get a total of (euro) 49.1 billion ($64 billion) between now and March, with (euro) 34.3 billion due in the coming days, officials said. Greece needs the money to stay afloat and avoid a potential default.

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The decision by the finance ministers of the 17 EU countries that use the euro caps an often-tortuous period, when Greece tried to convince its creditors that it was holding up its end of the bailout bargain.

In return for the money that will see Greece through the winter months, the country had to commit to further austerity measures, including more spending cuts and tax increases.

It also had to complete a bond buyback program, which is intended to lighten its crushing debt load. Earlier this week, Greece said it would buy back (euro) 31.9 billion ($41.5 billion) of its bonds from private investors at a third of their face value.

Greece has been battered by a financial crisis since late 2009 that has left it dependent on funds from international rescue loans for the past two and a half years. In return for the money, the austerity has contributed to a crushing recession. Figures earlier Thursday from the country's statistics office showed unemployment at a record high of 24.8 percent in the third quarter of 2012, compared with 17.7 percent in the same three months a year ago.

"Today's decision on the Greek program will remove the clouds that are hanging over Greece," Olli Rehn, the European commission for monetary affairs, said.

The meeting of eurozone finance ministers came just hours after finance ministers from the 27 countries in the European Union, which includes non-euro countries such as Britain and Poland, agreed to create a single supervisor for their banks, a key component of what many hope will eventually become a fully-fledged banking union.

Later Thursday, EU heads of state and government will gather in Brussels for a summit devoted to building a closer financial and political union, meant to avoid future financial crises.

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