Officials in the economically struggling country of Greece have come to an agreement on a third bailout when all sides agreed upon to the terms on Tuesday, August 11th following marathon length talks which were aimed at getting more money to Greece, which has been struggling financially since 2010 when the start of their financial crisis began.
“We are making the last attempt in difficult negotiations among the 19 members of the euro group, in spite of all the blows of the last 6 months and all the skepticism, to create preconditions for the Greek request to fall in line with the ESM” German Prime Minister Angela Merkel said in a statement regarding the agreement.
The agreement comes after a summer of turmoil for the southern European country who has been struggling to regain its economic since the summer of 2010 when what has been termed “irregularities” began to show up on
Greece’s financial reports and it was soon revealed that their budget deficit was not completely honest. Following the revelations, an economic slide began in 2010 and unemployment began taking a steep nose dive hitting its peak of 27.91% in September of 2013 and the youth unemployment rate at a high of 53.20%, which is up from 52.30%.
“It is a very tough deal. The left had to either escape or take huge responsibilities and prove it can help society Greek Health Minister Panagiotis Kouroublis told a local radio station and also advocating his support for snap elections to see if the deal has public support.
The left, what Mr. Kouroublis is referring to is the left wing of the Syriza Party which is bitterly divided over the bail out and what was supposed to be the party who was going to avoid caving into European demands however, despite the rejections of the bailout agreement by referendum on July 6th 2015, by a vote of 61.3% No vote to 38.7% yes.
Greece is one of many Southern European countries’ who have been hit by debt driven economic crisis within the last 5 years with Portugal, Spain, Cyprus and Ireland being the main EU countries who have been having trouble keeping their spending and debt under control.
“The institutions and the Greek authorities achieved an agreement in principle on a technical basis. Now as a next step, a political assessment will be made”, European Commission Spokeswoman, Annika Breidthardt said in a statement regarding the 3rd bailout.
In order for Athens to receive the 86 billion Euro bailout, Athens must agree to 1) Reform the pension system, 2) Increase taxes and 3) Adopt stricter banking rules.
Greece must also make a 3.2$ billion Euro repayment to the ECB (European Central Bank) by August 20th. This comes on the heels of Greece missing a 1.8 billion Euro repayment to the IMF which was due on July 28th.
One prominent government official, former finance minister Yanis Varoufakis who has been a ferocious opponent of the austerity measures that have been in place the last 5 years has called the new bailout a “new Versailles treaty” which refers to the harsh terms Germany agreed to after World War 1.
Ultimately it would be beneficial for both the Greek people and the major countries of the European Union to come up with an agreement that is both fair for the country of Greece and also far for the lenders who have been helping Greece along this long road that it has been on for the last 5 years.