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SPECULATORS celebrated on the Athens stock exchange today when an overnight deal in Luxembourg by eurozone finance ministers agreed debt-relief measures that could spell the end of eight years of EU-inflicted cuts.
The stock market rallied, pushing the main index up by 2.2 per cent, while government borrowing costs in the form of its benchmark 10-year bond fell to 4.1 per cent.
The agreement grants Greece a 10-year extension in repaying a large chunk of its unpayable debt burden and provides funds for government spending until early 2020 after loans linked to the bailout of foreign banks run out in August.
The “radical left” Syriza government needed the deal to allow it to emerge from the ruinous bailout programme imposed by the EU Commission, European Central Bank and the International Monetary Fund.
"Greek debt is sustainable going forward," claimed eurogroup president Mario Centeno.
French Finance Minister Bruno Le Maire said: “We have to recognise that Greece has really done its job — they have fulfilled their commitments."
EU commissioner Pierre Moscovici conceded: “There have been enormous sacrifices,” which won’t really end since government policies will remain under strict supervision and it must run high budget surpluses for decades to come.
To make a deal possible, the Greek parliament was obliged last week to push through another batch of economic changes demanded by creditors, including further reduced pensions and market-friendly “reforms” of healthcare and taxation.
Once the bailout is over, Greece will have to finance itself by borrowing on international bond markets.