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Brussels blog by some wire service journalists

Eurozone set for Greek deal, temporary default

By GABRIELE STEINHAUSER

BRUSSELS (AP) — European leaders were poised to sign off on a second bailout for Greece on Thursday, even at the cost of making the country the first euro state to partially default on its debt.

With the new rescue program for Greece, leaders want to “address the problems really at the root,” by lightening the country’s debt burden and restoring its economic competitiveness, German Chancellor Angela Merkel said as she arrived at an emergency summit in Brussels.

That will include getting private creditors to contribute to new aid, a move that would put Greece in so-called “selective default,” a partial renege on its debt deals.

Economists worry that a default, even if only temporary, could rock markets if not accompanied by substantial new financial support from the eurozone and a significant decrease in Greece’s debt burden.

READ THE FULL STORY HERE.

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