IN A NUTSHELL: MUST READ Greek Bailouts: Third Time’s A Charm
Eurozone leaders announced yesterday that they had reached a bailout deal with Greece. Greek PM Tsipras agreed to a deal after what one top official called ‘extensive mental waterboarding‘ by Merkel and Hollande. This will be the third bailout Greece gets since its troubles started in 2009… and will hopefully be the last. The potential bailout is strictly conditional on Greece passing certain reforms this week, and it includes harsh austerity measures, unconventional privatization funds and an attempt to break the back of Greek populism.Key elements of the deal include:
- Bridge financing: 12 billion euros in the short-term to avoid bankruptcy
- Tons of austerity: restructuring pensions and raising VAT
- Structural reform: labor reform, judicial reform, longer store hours, etc.
- Promises: Europe will discuss restructuring Greek debt and will negotiate a third bailout worth more than 80 billion euros
- A special trust, managed by Europe, to privatize Greek assets worth 50 billion euros — the money will be used to pay back the bailout and recapitalize the banks.
- 35 billion euros from the EU (though it’s unclear how this will be financed) to promote growth and unemployment
The final bailout negotiations will proceed only if the parliaments of Greece, Germany and Finland (huh?) agree on the plan.
Good Read: The Pnut’s dispatch from Athens |
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