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Eurozone agrees to extend Greece’s bailout

LORNE COOK
Associated Press

Brussels – — Greece and its creditors in the 19-nation eurozone reached an agreement Friday on extending the country’s rescue loans, a move that should ease concerns it was heading for the euro exit.

Athens will get an extension of four months, not six, as it had requested, said Jeroen Dijsselbloem, the eurozone’s top official. In return, Greece has committed to make a series of unspecified reforms to be enacted over the coming months.

Friday’s agreement was clinched just a week before Greece’s 240 billion euro ($272 billion) bailout program expires. It is aimed at buying time for both sides to agree on a longer-term deal to ease the burden of Greece’s bailout loans.

“We have established common ground again,” Dijsselbloem said after the meeting in Brussels.

Following two weeks of tense negotiations, the final deal showed compromise by both camps. Even German Finance Minister Wolfgang Schaeuble, who in recent weeks had taken a tough line, said “this is an important step forward. “

Investors appeared to breathe a sigh of relief and the Dow Jones index closed at a record high Friday as news of the Greek deal broke.

“This deal temporarily eases tensions and gives Greece breathing room to negotiate long term-debt relief,” said Jay Jacobs, research analyst at Global X Funds. However, he warned that it could just set up another “potential future standoff four months from now if parties involved continue brinksmanship negotiating tactics.”

Greece made the concession to not take any measures that might affect its budget targets.