By NICHOLAS PAPHITIS and THEODORA TONGAS, Associated Press
ATHENS, Greece (AP) — Greeks were torn between relief and foreboding on the news Tuesday that their country has received a new massive bailout — while the aid will protect them from a calamitous default and keep them in the euro bloc, it will also cost households years of economic hardship.
The initial relief created Tuesday by the 17-nation eurozone's approval of a new euro130 billion ($170 billion) rescue package was offset by a grim reality: Greece faces many more years of sacrifice, on top of a grueling 24 months of austerity measures that have contributed to record high unemployment and a rapidly contracting economy.
"I don't see (the agreement) with any joy because again we're being burdened with loans, loans, loans, with no end in sight," Athens architect Valia Rokou said.
The deal in Brussels gives Greece its second financial lifeline in less than two years — a combined package of foreign loans equivalent to about euro22,000 ($29,000) for every Greek citizen, children included. National debt already amounts to about euro32,000 ($42,300) each.
The hope is that the aid will grant the country the breathing space to enact widespread reforms and set it back on a path to growth.
Finance Minister Evangelos Venizelos said the agreement managed to prevent a potential catastrophe.
"We avoided the nightmare scenario," Venizelos said after returning to Athens following 15 hours of negotiations in Brussels. "We had a positive outcome, which, as I said in Brussels, was neither easy nor obvious."
Venizelos insisted that the way forward now involved "work, work, work, systematic effort, collectivity, unity, consensus, responsibility" so that Greeks can pull their country out of the crisis that has threatened to pull down Europe's single currency.
Greece has been surviving since May 2010 on a first euro110 billion ($146 billion) batch of loans from the eurozone and the International Monetary Fund. That was not enough for the country to pay off its debts, however, and without more help the country faced defaulting on a bond repayment it could not afford next month.
Some in Athens noted that despite the gloomy future, the rescue deals lightened the immediate financial uncertainty looming over the country.
"Everyone was depressed ... This news gives me great joy," said Christos Kontogeorgis, a pensioner.
As well as securing another deal with its European partners and the IMF, Greece is hoping to get its private creditors to agree a massive writedown in the holdings of their Greek debt. Banks, pension funds and other private investors are being asked to forgive some euro107 billion ($142 billion) of the total euro206 billion ($273 billion) in devalued Greek government bonds they hold.
Private bondholders will trade their bonds with new ones carrying much longer maturities and lower interest rates — an annual 2 percent by 2015, 3 percent to 2021 and 4.3 percent after that.
"It's not every day that euro100 billion in public debt is written off, or loans for euro130 billion agreed," Ta Nea newspaper said in an editorial. "There will be new sacrifices and difficulties, particularly for middle and lower earners. We must hope that this new period will become an opportunity for growth and better prospects."
The head of the conservative New Democracy party, the junior partner in Greece's interim coalition government, said the deal buys Greece time and hope of recovery.
"Greece is in pain and the people is suffering, therefore this is no time for jubilation," Antonis Samaras said during a visit to Cyprus.
Greece is in a fifth year of recession, with the economy forecast to shrink 4.5 percent this year before starting to expand again in 2014 — although by then it will have contracted by more than 17 percent since the beginning of the crisis in 2009. Unemployment is at 21 percent, with one in two workers under 25 out of a job.
Majority Socialist leader George Papandreou urged Greeks "to continue the fight we have started, despite the huge price, and not abandon the effort halfway through."
Without either aspect of Tuesday's agreement, Greece would have soon been forced to default on its debts — halting pension and civil servant salary payments. In all likelihood, Greece would have had to leave the common European currency it joined in 2001.
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John of NY 11:18AM February 21, 2012