Stocks Go Up With Greece Debt Deal
The Greece stock market closed Thursday with stocks sharply up following a debt deal for the country by European leaders.
Shares on the Athens Stock Exchange closed 4.82 percent higher and banking stocks went up nearly 12 percent after suffering losses earlier this week. Greece's high interest rates for long-term borrowing and default insurance also eased.
The deal requires banks to take on 50 percent of Greek bonds. Eurozone countries and the International Monetary Fund agreed to the deal.
"We have avoided a mortal national danger," Greece Prime Minister George Papandreou said. "We will also provide an additional 100 billion in euros ($140 billion) in rescue loans as a second bailout package for Greece."
The deal was reached early Thursday after night-long negotiations. Greece's troubled €230 billion ($320 billion) economy is heading into a fourth year of recession with a 16.5 percent unemployment rate. It prevented the Greek government's inability to pay its debt from turning into a full-blown financial crisis.
"Today we have the ability to close our accounts with the past," Papandreou said. "A burden from the past has gone, so that we can start a new era of development, on our own steam."
Greek Finance Minister Evangelos Venizelos said the new deal was more favorable for Greece and harsher on banks than a deal reached in July where banks would have taken 21 percent of losses on their bonds.
Those who oppose the agreement warned it condemns the country to another decade of an economic recession.
"We are not closer to the solution, but are faced with nine more years of collapse and poverty. Neither the economy, nor society can withstand this," Conservative opposition leader Antonis Samara said.
Stocks in the United States also soared after the Greece debt deal was reached. All 30 stocks in the Dow Jones industrial average chugged higher.
The Associated Press contributed to this report.