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Eurozone agrees new 109bn euros Greek bailout Leaders of the Eurozone countries have agreed a new bailout package for Greece worth 109bn euros ($155bn, £96.3bn). It includes, for the first time, support from private lenders, including banks, which will give Greece easier repayment terms. The deal, struck at an emergency summit of the Eurozone's 17 member countries, also involves support from the International Monetary Fund (IMF). Banks and other private investors will contribute 37bn euros to the package. French President Nicolas Sarkozy said private lenders will contribute a total of 135bn euros over 30 years to Greece. 'Haircut' The involvement of commercial lenders in providing assistance to Greece had been one of the thorniest issues under discussion. France and the European Central Bank (ECB) were against it, fearing it could spark a Europe-wide banking crisis, push Spain and possibly Italy into trouble, and even jeopardise the solvency of the ECB itself. Germany though insisted on the private sector bearing some of the pain, or, in the jargon "taking a haircut". One sticking point against roping in non-government lenders was that any move to allow the country easier repayment terms would be viewed by credit rating agencies as a tacit admittance that it was unable to sustain its borrowings - something that would put it into "partial default". That would limit the ability of certain institutions, including the ECB, to continue to lend Greece money, as its own rules mean it can only accept collateral from borrowers the agencies say have not defaulted on loans. European Commission President Jose Manuel Barroso said: "We... endorsed the plan of reducing overreliance on external credit ratings." He said policymakers would come forward in the autumn "with further proposals". EFSF freedom Another key element of the package is an expansion of the role of the European bailout mechanism, the European Financial Stability Facility (EFSF) so it can act more freely. The President of the European Council, Herman Van Rompuy said: "Reform of the EFSF will make it more flexible and effective. We do not now have to wait for substantial damage to occur before we can intervene." Financial markets had gained on hopes of a new deal. Shares in Milan rose by 4%, and Spanish shares jumped 3%. European banking shares led the way. In Germany, Commerzbank climbed almost 9% and Deutsche Bank rose 3.6%, while in France Societe Generale and Credit Agricole gained about 6%. German and French banks are the biggest holders of Greek debt. UK banking shares also rose strongly, with Barclays gaining 7.7%, Lloyds 5.9% and RBS 5.7%. Greece received its first aid package in May last year, but the debt crisis continues to undermine confidence in global financial markets, with some commentators suggesting it threatens the future of the euro itself. Athens has already implemented a raft of wide-ranging austerity measures, including spending cuts and tax rises, and earlier this month agreed to further drastic action to cut its debt. ---------------------------- Fuck. Ing. Hell. Talk about throwing good money after bad. We should have just built a big wall around the border ... would have been cheaper and more effective.