BRUSSELS: Greek Prime Minister George Papandreou on Thursday hailed "a new era, a new chapter" for the debt-strapped nation after Europe's leaders sealed a major deal to contain the eurozone debt crisis.
The deal notably will cut 100 billion euros off Greece's 350-billion-euro debt mountain thanks to an agreement between the eurozone and a banking lobby for banks to take 50 percent losses on Greek debt.
"It will be a new start for us. But the work must continue," Papandreou told reporters after a marathon summit in Brussels.
"We have escaped the trap of default," he said, adding that it was a "question of survival" for his country.
The deal with the banks in which they accept a "haircut" on their Greek loans should help cut the ratio of Greece's debt to gross domestic product (GDP) from 160 percent to 120 percent by 2020, a final eurozone statement said.
The eurozone states are also ready to contribute up to 30 billion euros in guarantees for renegotiated Greek debts, it said.
In addition, the eurozone leaders agreed a new bailout to replace the 109 billion euros in aid loans agreed in July. It would be worth up to 100 billion euros until 2014, and should be agreed by the end of the year.
The statement called on the International Monetary Fund (IMF) to continue contributing to the new programme, which will be joint with the EU.
IMF chief Christine Lagarde welcomed the deal for Greece, saying the agreement on slashing private sector loans to the country "is of the utmost importance to improve debt sustainability".
"It is based on a realistic assessment of the Greek economy and an appropriate burden-sharing between the private and official sectors," she said.
"I intend to recommend approval to the IMF's Executive Board of disbursement of the next tranche of our loan under the current programme.
"The continued commitment of the Greek authorities to implement agreed economic reforms remains, of course, paramount."
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