In July, 2011 Eurozone’s 17 member countries agreed to give Greece a massive financial bailout worth more than 150 billion dollars to try to rescue Greece’s shaken economy. In this respect, which of the following statements is/are correct ?
- 1. This is for the first time Greece has been given financial bailout by other European countries.
- 2. Private lenders including banks are also pledging support which will give Greece easier repayment terms.
Select the correct answer using the code given below :
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CAPF – 2011
Statement 2 is correct. The July 2011 bailout package involved significant private sector involvement. Private creditors, including banks, were indeed asked to contribute to the rescue by accepting a voluntary exchange of Greek bonds for new bonds with longer maturities and lower interest rates (often referred to as a “haircut” or debt restructuring), which effectively provided Greece with easier repayment terms.