Europe seals new Greek bailout to avert default
Euro zone finance ministers sealed a €130-billion ($172 billion) bailout for Greece on Tuesday to avert a chaotic default next month after forcing Athens to commit to unpopular cuts and private bondholders to accept deeper losses.business Updated: Feb 21, 2012 22:51 IST
Euro zone finance ministers sealed a €130-billion ($172 billion) bailout for Greece on Tuesday to avert a chaotic default next month after forcing Athens to commit to unpopular cuts and private bondholders to accept deeper losses.
By agreeing that the European Central Bank (ECB) would distribute its profits from bond buying and private bondholders would take more losses, the ministers reduced Greece’s debt to a point that should secure funding from the International Monetary Fund and help shore up the 17-country currency bloc.
The agreement was hailed as a step forward for Greece, but doubts immediately emerged as to whether it would do much more than deal with its most pressing debt problems.
The austerity measures wrought from Greece are widely disliked among the population and may present difficulties for a country which is due to hold an election in April.
Further street unrest could test politicians’ commitment to cuts in wages, pensions and jobs. Greece's two biggest labour unions called a protest in Athens on Wednesday.
Anastasis Chrisopoulos, a 31-year-old Athens taxi driver, saw no reason to cheer the deal.
“So what?” he asked. “Things will only get worse. We have reached a point where we're trying to figure out how to survive just the next day, let alone the next 10 days, the next month, the next year.”
Parliaments in three countries that have been most critical of Greece’s second bailout - Germany, the Netherlands and Finland — must now approve the package. German finance minister Wolfgang Schaeuble, who caused an outcry by suggesting that Greece was a “bottomless pit”, said he was confident it would be passed.