Euro zone leaders adopted on July 21 2011 a further package of measures aimed at preventing Greece from defaulting on its huge public debt and aimed at stabilising the euro, the 17-member European currency.

The European Union and the International Monetary Fund said that they would give Greece a second bailout worth 109 billion euro.

Banks and other private investors will contribute 37 billion euro to the package, the BBC said.

European Commission President Jose Barroso called the package "very ambitious" and "credible".

He described the package as:

" * Firstly, measures to substantially improve the sustainability of Greek public finances. The lowering of interest rates and the extension of maturities are an essential element in this respect. This is true both for public support and private sector involvement. This of course requires full implementation of the Greek macroeconomic adjustment programme. It is of course a two-way street. Prime Minister Papandreou gave in very clear terms his assurances in this respect.

* Secondly, feasibility and limits of Private Sector Involvement (PSI). We now are clear about what we mean by PSI and to whom it applies. It is a voluntary approach by the private sector and it therefore is a solution with the markets, not against them. Importantly, we are crystal clear that PSI is for Greece, and Greece alone. It is an exceptional solution which we exclude for others. It is a unique solution.

* Thirdly, scope for more flexible action through the European Financial Stability Facility (EFSF). We have agreed an ambitious reform of the EFSF making it more flexible and effective, as we had asked back in January in the 2011 Commission Annual Growth Survey. We are lowering the lending rates, extending the maturities and allowing it to do more, including intervention on the secondary markets apart from intervention with a precautionary nature. This means that we will be in a position to act whenever damage threatens. Unlike before, when we needed to wait for substantial damage to occur before we could intervene.

* Fourthly, repair of the banking sector still needed. The second EU-wide stress test was published on 15 July. It revealed remaining pockets of vulnerability in the European banking system. We give the markets a credible commitment to recapitalise those banks which have failed or nearly failed the test.

* Fifthly, measures to ensure the provision of liquidity to our banking system. There can be no comprehensive solution to the sovereign crisis without the full support of the European Central Bank and the Eurosystem. And we have this today," Barroso said.

The euro rose sharply and US and European markets were broadly up following reported details of the draft, CNN reported.

Greek prime minister George Papandreou said that his country had, at last, a programme to tackle its debt in the long term.

Speaking after the announcement of the deal, Papandreou said: "We are a proud people, we are a creative and industrious people, and the only thing we are asking for is the right to make major changes in our country, profound deep changes in our country".