Funds Released For Greece Oct 22, 2011

 

Greece handed 8bn aid package lifeline but euro concerns remain Greece was handed a lifeline on Friday night after international lenders finally released an €8bn (£6.95bn) aid package for the beleaguered country, kicking off a crucial weekend for the future of the eurozone. Although the agreement will allow Athens to avoid imminent default, a report leaked at the Brussels summit on Friday night suggested the terms of the second Greek bail-out would have to be ripped up in order to stabilise the country.

The report – prepared for the troika of the IMF, European Central Bank and European Commission – suggested Greece's economy has deteriorated to such an extent that lenders would have to find €252bn in loans by the end of the decade. The release of the bail-out funds came as Angela Merkel sought to play down fears of a deadlock between Germany and France, insisting that a debt crisis resolution has been delayed by "technical details", not disagreement. Those disagreements are thought to focus, in part, on the size of haircuts Greek bondholders will be forced to accept. The report said that in order to return Greece's bail-out to the €109bn size agreed in July, bondholders would have to take a 60pc haircut. The German Chancellor told the Bundestag on Friday that a "second meeting" on Wednesday had been called to nail down details because it was "better to be safe than sorry". Mrs Merkel earlier told MPs any private bondholders will be forced to take a bigger hit in any new Greek bail-out, of up to 50pc. France, though, is keen to limit the "haircut" to 40pc because it fears a technical default.

Global stock markets rose sharply as traders "bought hope" that European leaders would deliver their promise of a "comprehensive and ambitious global response". Germany's DAX soared 3.5pc, while France's CAC 40 and Spain's Ibex each rose 2.8pc. In London, the FTSE 100 closed up 1.9pc.A meeting of the eurozone finance ministers – the so-called Eurogroup – kicked off the weekend of talks in Brussels. On the Greek bail-out, which needs to be approved by the IMF, the group said: "We have endorsed the disbursement of the next tranche of financial assistance to Greece . The disbursement is expected to take place in the first half of November."Confirmation that Greece will not run out of money next month came with a warning from the finance ministers. "We note the macroeconomic situation has deteriorated since the fourth review and that economic challenges remain large," they said, adding a second bail-out remains necessary "to ensure debt sustainability". This will involve "additional new official financing and private sector involvement".There were no further public statements as talks went on into the night, heightening fears the summit has lost its purpose since Germany and France's shock announcement that any agreement would be delayed until Wednesday. Mrs Merkel, who is struggling to keep her coalition together on domestic issues as well as Europe, is bound by law to seek the Bundestag's approval before finalising a deal.Leaders around the world urged Europe to grasp the chance to resolve the crisis. President Barack Obama led a video conference call with David Cameron, Mrs Merkel and French president Nicolas Sarkozy late on Thursday night. China's prime minister, Wen Jiabao, spoke with Herman Van Rompuy, president of the European Council. According to China's foreign ministry he called for action to stop the crisis spreading. Mr Jiabao added: "I've seen that Europe's leaders have an ardent political will and I hope they can turn their political will into concrete and effective action ."On Saturday, the Eurogroup talks widen to include finance ministers from all 27 EU countries, including George Osborne. On Sunday, David Cameron will join the EU leaders' summit. The talks focus on a three-pronged plan: expanding the European Financial Stability Facility bail-out fund; recapitalising the banks; and pushing for greater economic integration.Italy will be the major focus. Silvio Berlusconi is expected to commit to an ambitious set of austerity measures.

Warning Graphic Video: Muammar Gaddafi is Dead Oct 22, 2011

Libyans exploded in excitement on Thursday afternoon at reports that Muammar Gaddafi had been captured and killed in his hometown of Sirt, where rebels have fought a grueling battle for weeks to crush his remaining armed loyalists.

As television broke the news that Sirt had finally fallen to the rebel forces, gunfire began resounding around the capital. About 20 minutes later came the news, from a rebel commander in Sirt, that Gaddafi had been captured hiding in a hole in the coastal city, about 230 miles (370 km) east along the Mediterranean. Soon after came word that he was dead. The interim government says it is drafting a pathology report. In this city of 2 million people, thousands poured into the streets, firing guns into the air. The ships in Tripoli harbor blared their horns for more than an hour, and the mosques played prayers praising Allah over the deafening noise of car horns. Crowds of people converged on the seafront to move toward Martyrs' Square in the heart of the capital, where only two months ago Gaddafi's supporters held demonstrations in support of the dictatorship.

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In the meantime, a well-armed group of loyalists in Sirt have held out, waging a grueling war of attrition against the rebel forces — even though the rest of the country had fallen to Gaddafi's foes. With the war dragging on, NTC officials were increasingly hampered in administering their new country. Prime Minister Mahmoud Jibril told journalists on Wednesday evening that Libya could "move from a national struggle to chaos." He said he was particularly concerned about the convoys of heavy weaponry that slipped into the neighboring country of Niger in August, after Tripoli fell. The rebels have said for weeks that they will be able to declare the war over when Sirt — the last Gaddafi stronghold — falls. With Gaddafi gone, Libyan officials say, the country can finally move beyond the revolution and begin rebuilding after months of war. "It means we will have a transitional government, then we will have an election in a few months," Mahmoud Shammam, the NTC's head of media, told the BBC on Thursday.

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