Greek deal to be approved…on three conditions
The Eurogroup, which represents the 17 finance ministers of the Eurozone member states, did not approve the Greek package deal with the country's creditors to save her from bankruptcy on 9 February, but instead set out three conditions for this to be achieved in its next meeting on 15 February.
These conditions are:
* The Greek Parliament has to pass the package;
* strong written reassurances from Greek political leaders that the deal will be implemented by the government that is formed after the next general election, whenever it takes place, and;
* the present Papademos government must be specific on how it is going to cover the €325 million gap that still exists in the package.
* strong written reassurances from Greek political leaders that the deal will be implemented by the government that is formed after the next general election, whenever it takes place, and;
* the present Papademos government must be specific on how it is going to cover the €325 million gap that still exists in the package.
This announcement was made by Eurogroup chief Jean-Claude Juncker late on 9 February – it must be remembered that the Greek package contains two agreements, one with the country's banks and the other with the EU-ECB-IMF troika, which has been the only source of finance for Greece after June 2010, when the country was cut off from the capital market.
After a first unsuccessful attempt to correct the fiscal mess in Greece, the troika has now assembled a second package of soft loans for Athens of €130 billion, but this is accompanied by new austerity measures and far-reaching structural policies - Greece cannot have one without the other.
The other deal with country's private lenders, namely the Private Sector Involvement (PSI) to cut down sovereign debt, is already in place, but the Eurogroup will not allow it before the main agreement with the troika is in place.
Greece must now comply with these terms set by the Eurozone’s finance ministers and, given that the country is in a state of political limbo, the vote in parliament and the written reassurances by leaders may prove to be difficult for the Papademos government to secure.
No comments:
Post a Comment