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March 12, 2012 at 09:43 AM
Euro area finance ministers gathered Monday to approve a second bailout for Greece after the country won approval from private bondholders to cut its debt.
Bloomberg reported that not only did ministers plan to sign off on the rescue package of 130 billion euros ($170 billion), they also intended to discuss the financial woes of Spain and Portugal and the measures both countries are taking to stem contagion of the eurozone debt crisis.
Greece’s pressure on its private creditors to accept haircuts in the bonds they hold led to a “restructuring credit event,” and it is expected that $3 billion in credit default swap contracts will be paid out as a result, according to the New York-based International Swaps & Derivatives Association.
In addition, difficulties are anticipated in keeping Greece on track to keep budgetary promises it has made to win approval of the bailout, and some officials seem convinced that the country will require even further assistance as it struggles to free itself from its current financial problems.
