Written by: Andrea Martin
Media by: Garrett Streeter
Eurozone Extends Greece’s Loan Program
Greece’s plan to extend its bailout won over the Eurozone as finance minsters approved a four-month extension period for the country.
“We call on the Greek authorities to further develop and broaden the list of reform measures, based on the current arrangement, in close coordination with the institutions in order to allow for a speedy and successful conclusion of the review,” a statement released by the Eurozone said.
The country will be supported by other nations within the European Union, which presents a problem for their four-month deal; Prime Minister Alexis Tsipras must strictly follow the broad terms of Greece’s former bailout plan in order to fully secure the new bailout plan, something that the PM said he would scrap as soon as he could.
The pressure mounted upon PM Tsipras comes from Germany’s Finance Minister Wolfgang Schaeuble who announced that Greece would not receive “a single euro” until it met its former pledges in its faulty bailout plan.
“If they fulfill those, then they can still receive the outstanding payments. And if they don’t fulfill those, there will be no payments,” Schaeuble said.
Mario Draghi, president of the European Central Bank, said that Greece’s new proposals were a “valid starting point”, and was completely open to new changes regarding Greece’s former bailout plan. However, Greece would need to be more clear and precise regarding certain loan conditions and would need to be revised “with measures of equal or better quality.”
Greece released a letter highlighting their new proposals, which follows as such:
• Combat tax evasion
• Tackle corruption
• Commit not to roll back already introduced privatizations, but review privatizations not yet implemented
• Introduce collective bargaining, stopping short of raising the minimum wage immediately
• Tackle Greece’s “humanitarian crisis” with housing guarantees and free medical care for the uninsured unemployed, with no overall public spending increase
• Reform public sector wages to avoid further wage cuts, without increasing overall wage bill
• Achieve pensions savings by consolidating funds and eliminating incentives for early retirement – not cutting payments
• Reduce the number of ministries from 16 to 10, cutting special advisers and fringe benefits for officials
A pilot program has also been proposed by Greece, which would seek to guarantee a minimum income for poor families, and the government also plans to raise the minimum wage for homeowners who struggle to pay for their mortgage payments.
Greece’s economic problem began with the global recession and was desperate for a bailout program in order to survive. The conditions imposed by its creditors – the European Commission, the European Central Bank and the International Monetary Fund – became unpopular in Greece, which resulted in the election of the far-left Syriza Party that pledged a strong anti-austerity rhetoric.