EU leaders agree 'selective default' plan for Greece

EU leaders have agreed a further €109bn (£96bn) bailout for Greece, one-third of which will come from private sector bondholders.

After a day of crisis talks in Brussels, the heads of the 17 eurozone member countries and the International Monetary Fund drafted an agreement to allow a selective default by imposing 'haircuts' or losses on bondholders. The default will be the first on a eurozone bond since the launch of the euro, the FT reports. Eurozone heads also agreed to lower interest rates on rescue loans to Greece, Ireland and Portugal. The countries will pay about 3.5% - 100-200 basis points lower than at present, and will have their payment schedule extended from 7.5 years to 15-30 years. Meanwhile the Eur...