Greece

Eurozone agrees new bailout


Published

Last night, after a mammoth 11 hour meeting, Eurozone members agreed to give Greece the €130 billion bailout it needs to escape default in March.

The deal means that the Eurozone will cough up another €130 billion (£110bn; $172bn), private creditors will write off debt of €100bn (£84bn; $132bn) and the Greek government will find a further €325 million (£270m; $430m) in austerity measures in this year’s budget.

That will then allow the Greek government to meet its debt repayment of €14.5 billion (£12bn; $19bn) due on 20th March.

The Eurozone finance ministers extracted one other agreement from the Greek government, that a permanent office in Athens of the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) will be established to ensure that the government meets all its agreements.

The additional austerity measures the Greek government has agreed include:

• The minimum wage is to be cut by 22% and frozen until the end of 2015
• The number of employees in the public sector will be cut by 150,000 up to 2015. The government has set a target of hiring one person for every five people leaving.
• Pension reforms
• Spending on pharmaceuticals to drop from 1.9% to 1.3% of GDP
• Spending on social programmes to fall by 1.5% up to 2015
• Some government units to be closed, downsized or outsourced
• A simplification of the tax system to broaden the tax base.

Meanwhile there are continued calls for a general election to be held as soon as possible. According to the Athens News a new poll by MARC to be published this week shows that any poll held today would see eight political parties in a new Parliament.

The poll suggests that the centre-right opposition party, New Democracy (ND), led by Antonis Samaras would get 24% of the vote. The Democratic Left (DIMAR) would get 15.2% and the ruling party (prior to the unity government), the Panhellenic Socialist Movement (PASOK) would get 13.9%.

The Communist Party of Greece (KKE) would receive 11.9% and the Radical Left Coalition (SYRIZA) would get 10.7%. Other parties to cross the 3% threshold would be the Popular Orthodox Party (LAOS), the Ecologists/Greens (OP) and the Democratic Alliance (DISY).

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