Greek deal ‘boost for British economy’

Single currency governments approved a second massive rescue package for the ailing nation after more than 12 hours of talks in Brussels.

Haggling over figures, financial targets and Greek government belt-tightening pledges went on through the night in a last-ditch attempt to rally markets and put crisis-hit Athens back on the path to economic recovery.

Mr Osborne said: “Of course, resolving the Greek situation is only part of resolving the eurozone crisis but I think we took a really significant step towards that last night and that is good for Britain because resolving the eurozone crisis would be the biggest boost that Britain could get for its economy this year.”

The Chancellor said the package was a major step towards securing debt sustainability in Greece.

“That’s been the crucial missing ingredient,” he added. “They have not, in the past, come up with a sustainable position for Greece. I think they have made real progress now towards giving a sustainable debt position for Greece.

“Of course the Greek people, the Greek political system has to deliver really difficult decisions now but I don’t think Greece has any other option.”

He added: “Hopefully we can all move on now and get the European economy growing.”

In return for the latest 130bn euro (£110bn) bail-out and a private creditor debt write-off worth about another E100bn euros (£84bn), the Greek government is pledged to implement fully a severe austerity package of pay, pension and jobs cuts, as well as finding savings of E325m (£270m) in this year’s national budget.

The Greek economy received a E110bn euro (£91bn) bailout from the EU and IMF in 2010 but it was not enough to lift Greece out of crisis.