EU May Accept Greek Default

Bondholders will foot part of the bill in new deal to stem Europe’s debt crisis.

Euro-area leaders redoubled efforts to end the 21-month sovereign bond crisis as they erected a firewall around Spain and Italy and risked temporary default to lighten Greece’s debt burden.

After eight hours of talks in Brussels, leaders announced 159 billion euros ($229 billion) of new aid for Greece late yesterday and cajoled bondholders into footing part of the bill. They also empowered their 440-billion euro rescue fund to buy debt across stressed euro nations after a market rout last week sparked concern the crisis was spreading. The fund can also aid troubled banks and offer credit-lines to repel speculators.

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