FOLLOWING A MEETING of Eurozone leaders today, Ireland has secured an interest rate cut and an extension on its bailout loan repayments.

The Taoiseach said that the country’s interest rate will be reduced from 6 per cent to 3.5 – 4 per cent. The terms of the bailout loans will also be extended to 15 years.

Greece

Eurozone leaders also said that, together with the International Monetary Fund, they will give Greece a second bailout worth €109 billion. The private sector is expected to contribute €49.6 billion to Greece.

Speaking at a press conference this evening, the president of the European Council announced that Greece is to receive a reduced interest rate on its bailout loans and more time to pay back its debts. Herman Van Rompuy said that he was “glad to announce that we found a common response to the crisis situation”, and that the heads of eurozone countries had agreed on a number of points in order to tackle the debt crisis:

Improved Greek debt sustainability

A new assistance programme to fully cover the financing gap will be applied to Greece from the EU and IMF. Greece will also be offered a reduced interest rate and given more time to repay.

Eurozone loans will have a 3.5 percent interest rate and have an average maturity of 15 years, up from 7 1/2 years in the current rescue loans.

Measures to stop contagion

Leaders agreed that that Greece needed an “exceptional and unique” solution and, as such, voluntary private sector involvement would be allowed in the eurozone area but that this will be fully “limited to Greece”.

Crisis management

A decision was reached to “improve the eurozone’s governance” and therefore the eurozone’s reliance on external credit ratings agencies is to be reduced.

Full text of the statement by the Euro area leaders & EU institutions approved at today’s summit >

Though the deal is likely trigger a temporary default by Greece — the first ever by a euro state — it could also help the ailing country emerge from its debt hole in the longer term and shake up Europe’s way of handling the crisis, by making it more proactive.

Additional reporting by the AP

Read more: Irish bailout rate ‘cut to under 4 per cent’ by draft agreement – report >

In full: The draft document being discussed in Brussels (Telegraph) >