EURO zone finance ministers sealed a 130-billion-euro (US$171 billion) bailout for Greece on Tuesday, to avert a chaotic default in March, after persuading private bondholders to take greater losses and Athens to commit to deep cuts.

    After 13 hours of talks, ministers finalized measures to cut Greece’s debt to 120.5 percent of its gross domestic product by 2020 — a fraction above the target — to secure its second rescue in less than two years and meet a bond repayment next month.

    By agreeing that the European Central Bank would distribute its profits from bond buying, and private bondholders would take more losses, the ministers reduced the debt to a point that should secure funding from the International Monetary Fund and help shore up the 17-country currency bloc.

    But the austerity measures wrought from Greece are widely unpopular among the population, and may hold difficulties for a country that is due to hold an election in April. Further protests could test politicians’ commitment to cuts to wages, pensions and jobs.

    A return to economic growth could take as much as a decade, a prospect that brought thousands of Greeks onto the streets to protest against austerity measures Sunday. The cuts will deepen its five-year recession, hurting government revenues.

    A report prepared by experts from the European Union, European Central Bank and International Monetary Fund said Greece would need extra relief to cut its debts near to the official debt target given the worsening state of its economy.

    If Athens did not follow through on economic reforms and savings to make its economy more competitive, its debt could hit 160 percent by 2020, said the report.

    The accord will enable Athens to launch a bond swap with private investors to help put it on a more stable financial footing and keep it inside the euro zone.

    Around 100 billion euros of debt will be written off as banks and insurers swap bonds they hold for longer-dated securities that pay a lower coupon. (SD-Agencies)