Greece's creditors agreed Friday to take cents on the euro in the biggest debt writedown in history, providing much-needed breathing room for European nations living beyond their means. The agreement paves the way for Greece to receive an enormous second bailout in the hopes of containing the crisis before it drags the entire continent further into chaos.
Without the agreement, Greece would have risked defaulting on its debts in two weeks' time, an event that would have sparked turmoil in the financial markets and sent shockwaves through the other 16 countries that use the euro.
Following weeks of intense discussions, the Greek government said Friday that 83.5 percent of private investors holding its government debt had agreed to a bond swap that would involve them taking a cut in more than half the face value of their investments with softer repayment terms for Greece.
The bond swap was a radical attempt to pull Greece out of its debt spiral and put its shrinking economy back on the path to recovery. The deal is also a key condition for Greece to receive a euro130 billion ($172 billion) package of rescue loans from other eurozone countries and the International Monetary Fund.
"We have achieved an exceptional success ... and I believe everyone will soon realize that this is the only way to keep the country on its feet and give it a second historic chance that it needs," Finance Minister Evangelos Venizelos told Parliament.