European governments moved toward a second rescue of Greece, calculating that the 130 billion-euro ($172 billion) cost of a fresh bailout is a price worth paying to prevent a default that could shatter the euro area.
Finance ministers will weigh the terms of new loans to Greece and a possible contribution by central banks at a meeting today in Brussels. They also aim to start a bond exchange with private investors meant to stave off a Greek bankruptcy next month.
Unchanged terms would leave the debt at 129 percent of GDP by 2020, too high to be “sustainable,” according to European and International Monetary Fund estimates that were shown to the ministers on a Feb. 15 conference call, two officials said.
Frustrated with Greece’s inability to meet two years of targets for cutting the deficit and selling off state assets, donor countries are also insisting on more control over how Greece spends the money.