A second bailout for Greece is in the works based on a comprehensive debt package that aims to keep Greek's debt problems contained.

However, the aid won't be enough to keep the country from restricted default.

A meeting of Eurozone leaders produced a package for Greece that includes €109 billion ($155.7 billion) in new loans to Greece, an extension of Greece's repayment terms and a reduction of the amount it must pay on existing loans and voluntary private sector participation in these options.

The package also provides measures to keep the Greek crisis from spreading and offers an extension of repayment terms on loans made to the Ireland and Portugal. The package also extends additional powers to the European Financial Stability Facility to buy up bonds and to make credit available to countries such as Spain and Italy.

The Institute of International Finance (IIF) – a global trade body representing big banks and other major lenders – said the planned debt restructuring would target participation by 90% of Greece's private sector lenders.

"The politicians have effectively kitchen-sinked it and created a facility akin to a hoover designed to suck up all of Europe's ills," Societe Generale analysts said. "Significant questions remain but the market likes it enough at the moment to put some risk back on, we've rallied hard."

Still the debt package for Greece is a solution for only part of Europe's problems. The country, despite receiving its €159 billion European bailout, will still have to deal with the potential ratings implications the Fitch Ratings downgrade will bring.

Fitch said that despite the European bailout package unveiled yesterday, the private sector involvement in a new financial program in support of Greece  will be considered a “restricted default."

As such, Fitch will place the Greek sovereign rating into 'Restricted Default' and assign 'Default' ratings to the affected Greek government bonds on the date that the offer period for the proposed debt exchange closes.

Fitch will assign new post-default ratings to Greece and to the new debt instruments once the default event is cured with the issue of new securities to participating bondholders. The new ratings will likely be low speculative-grade.

However, Fitch also noted that  the reduction in interest rates and extension of maturities in the Greek debt package will potentially offers the country a window of opportunity to regain solvency.

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