After weeks of debate, European leaders decided on a rescue plan for Greece that will give Europe’s bailout fund new powers to bolster flagging economies, though it may push Greece into temporary default. Part of the €109 billion aid package would exchange existing bonds for new ones with lower interest rates and longer maturities, which rating agencies warn may count as a limited form of default. The plan also gives the European bailout fund power to buy bonds and recapitalize banks, turning it into a European version of the International Monetary Fund. The agreement deals with Portugal's and Ireland’s debts as well, in what a draft calls a “European Marshall Plan.”
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