Officials from the EU recently said that Greece has met the necessary reforms that it had to make to get money for a third bailout, some of which would go to its financial sector, which has suffered heavily since the economic crisis of 2009. The recent Greek election, it would seem, was very much to the EU’s liking.
“The tendency is to have the financial sector reforms separated from the first full review,” an anonymous official from the EU said regarding the approval of the new bailout funds. The Greek parliament is expected to vote on a list of 48 points of reforms for the financial sector, on Friday October 9th.
The economic crisis which has been plaguing Greece since a year after the worldwide financial crisis has hit many other developed countries and spread around the world mainly inflicting pain on vulnerable economies. “So the 15 billion could be released on the completion of the financial sector reforms alone” the anonymous official continued in the statement released regarding the approval. The bailout which would be Greece’s third bailout in five years was approved in mid-August and is worth up to 86 billion Euros or roughly $95 billion.
European commission president Jean Claude Juncker said the bailout agreement is a big change economically, for Greece, and said in August that the agreement sent a “loud and clear message” that the Grexit that was feared (another term used for Greece leaving the EU due to financial difficulties) would not happen and Greece would remain in the EU.
The concern of Greece leaving the EU dominated much of the summer headlines as it was feared that if Greece left the EU than other debt plagued countries of the institution including Portugal, Spain, Ireland (countries who have made up the sovereign debt crisis) would follow and lead to a dissolving of the EU.
Greece currently owes its international creditors, 323 billion Euros, mainly to Germany who has been a key financial supporter. The debt crisis has not been the only factor contributing to the despair in Greece as the unemployment rate for adults has hit 25.2% (with June being the last date available) with the unemployment rate for the youth of Greece hitting 48.30%.
“We remember being at the kitchen table and our parents talking about when times were good”, 22 year old college student, Iro Pappa said during a protest outside a Greek restaurant, Revolt. “But I don’t know when we’ll experience it ourselves. How do you outrun a crisis”?
In exchange for the bailout money to be released, Greece has proposed a list of reforms that include 1) Reduction of the pensions, 2) Restructuring of the income tax, and 3) A reduction of defense expenditures by 100 million Euros.
The approval for Greece to get the bailout money and the three points of reforms that it has proposed are ultimately a step in the right direction but there is more that is needed to be done as Greece attempts to dig itself out of the 323 billion Euro debt that it currently owes. Watch this space.