European heads of state at the emergency summit in Brussels agreed late on Thursday a new €109bn bailout package for Greece.

The deal includes a reduced interest rate of 3.5 percent and a time extension to between 15 and 30 years from the previous 7.5 years. “The new programme is designed, notably through lower interest rates and extended maturities, to decisively improve the debt sustainability and refinancing profile of Greece,” the EC statement said.

There will also be a net contribution of the private sector of an estimated €37bn. The figure agreed by European leaders will take into account the cost of credit enhancements for the period 2011-2014. The statement stressed several times that contributions by the private sector will be voluntary and will not form part of any possible future bailouts for other nations.

“We agree to support a new programme for Greece and, together with the IMF and the voluntary contribution of the private sector, to fully cover the financing gap. We needed a credible package, and now we have a credible package. For the first time in the crisis, politics and markets are coming together,” President Barroso said.