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After a marathon speed meeting that lasted more than six hours, the European leaders agreed on the extension of the 110 billion Euros Greek loan repayment to 7 years and a half and reduce its interest rate by one percentage point from 5.2 to 4.2 per cent. 

The leaders of the 17 Eurozone member countries adopted on first reading the contract on competition and took the first step towards the European response to the government debt crisis. Meanwhile, the road was opened for other important negotiations on changes in cash assistance and meeting individual demands of Greece and Ireland.

Friday's meeting created an atmosphere of optimism regarding the support for countries with budget problems. However, if the decision of the summer summit on March 25, be in favor of this support, it is more than certain that these countries will be requested for compensation. 

For Greece this means that the government will bind that it will conduct the privatization of state assets worth 50 billion Euros, reforms and implementation of the memorandum of economic assistance without bias. 

In recent weeks, German Chancellor Angela Merkel became subject to heavy pressure from senior EU officials and politicians from Washington to agree to the adoption of necessary measures to ensure stability in the Eurozone. The pressure drew Berlin towards a more flexible position days before summer summit, on which final decisions will be taken. 

Eurozone finance ministers were commissioned to prepare their proposals for changes to the European Fund for financial stability. They will clarify them on their meetings on March 14 and 21 so that they can submit their final proposal on the summer summit. 

So far it seems that Germany agrees to increase the guarantees of the Eurozone countries to the Fund, to enable it to tap financial markets to 440 billion Euros instead of todays 250 billion Euros. However, Berlin is still reluctant to the possibility for the Fund to intervene in the purchase of government bonds. Experts believe that it will be difficult for Germany to enforce its position, because the flexibility of the Fund is considered as the only way for financial markets to "calm down". 

In this connection European sources believe that Angela Merkel could agree to an agreement that will enable the Fund to intervene in the bond market under very strict conditions and if it threatens the stability of the Eurozone and the Euro. 

They also argue that in order for Germany to draw back, it will require the countries with budgetary problems to take several obligations, which may exceed the targets set in the national budgetary reorganization and reform. Significantly, although they welcomed the successful implementation of the programs, the European leaders called Greece, Ireland and Portugal to increase their efforts. In particular, it was stressed that it is very important for Greece to carry out privatizations and to utilize government property worth 50 billion Euros. 

After the meeting it was almost clear that the deadline for repaying Greek loans will be extended. Regarding the second request to reduce the borrowing rate, which concerns Greece and Ireland, the German chancellor did not reveal her intentions, but it seems that both sides have something to expect. German sources stressed, however, that any reduction of interest rates will involve the assumption of certain obligations from Athens and Dublin. 

Ireland may be required to increase corporate taxes, which are currently the lowest in the whole Eurozone, which creates illegal tax competition. 

The Greek government can be requested by European leaders to formally bind that it will undertake privatizations and recover state assets. At the same time, if an extension for payment of taxes, received under the support facility, and delay of their expiration after 2020, will mean a reduction in contributions to repay the Greek debt by 74 million Euros over the period 2013-2015. 

The big problem for Greece concerns the period 2014-2015, which is aggravated also with the expiry of the old bonds. Under the current program payment and term loans of support mechanism for loans from the European Union expire in 2016 for the 80 billion Euros from the European Union and by 2018 the 30-billion Euros from the International Monetary Fund. 

Amortization for the period 2014-2015 reached 145 billion Euros, of which 77.5 billion Euros were from the expiry of the old bonds and 67.5 billion Euros of loans taken by the support mechanism. 

A little later, Greek Prime Minister Giorgios Papandreou defined the decisions of the European leaders as "historic for the Eurozone" and stressed that the first step was made towards resolving the debt crisis and the mortification of the financial markets. 

European leaders greeted the obligation which Athens undertook “to fully and fast implement the privatization program and recovery of state assets worth 50 billion Euros, that was announced”. 

The text of the final document issued after the summit stated that all member countries of the Eurozone should establish a binding legal framework that from now on will ensure fiscal discipline.