EU Agrees to Bailout Terms for Greece
July 13, 2015
Greek demonstrators protest against austerity measures proposed by the EU, demanding Greece leave the European Union. Credit: © Yiorgos GR/Shutterstock
After an 18-hour session of talks, the European Union announced that it was willing to consider offering a third financial bailout to the Greek government. The value of the bailout is around 82 billion to 86 billion euros ($91 billion to $96 billion). The banks in Greece have been closed for going on the second week, most Greek citizens are under currency restrictions for how much money they may withdraw from their accounts on a daily basis, and the nation is nearly out of currency. If a bailout did not come soon, Greece would have been forced to declare bankruptcy and would likely have left the EU.
By Wednesday, July 15, the Greek parliament must vote in favor of the new bailout terms, which were seen by some experts as being fairly harsh. Some of the terms Greece must agree to include:
- A possible extension on the time frame in which debt payments are due, but no reduction in the overall debt owed by the Greek government.
- A demand that Greece begin to privatize some of its assets; for example, the nation’s state-owned electricity grid could be sold off to private companies and the profit used to create a fund for investment and for paying off debt.
- A reform of the Greek pension and tax systems.
If the Greek parliament agrees to the EU terms, the bailout package must also be approved by the parliaments of Germany and Finland. If these governments all approve the package, Greece would also be eligible for “bridge” financing, or immediate short-term financing, to stave off imminent bankruptcy. Experts were uncertain if Greek Prime Minister Alex Tsipras would be able to persuade members of his left-leaning party, Syriza, to vote in favor of the package.
Other Behind the headline articles:
- Greece Votes Oxi! (July 2015)
- Greece Closes Banks, as Economic Crisis Escalates (June 2015)
- Greece Gets a Reprieve (February 2015)
