The new rescue plan devised by European leaders for the indebted Greek nation has been successful. Greece needed the bailout package as without it, it would have defaulted on its bond repayment next month.
After the plan was announced, the United States Treasury Department’s top official, Brainard called the new bailout plan as an “important step” and one of the many challenges of the continent is to boost economic growth.
Lael Brainard, who is the undersecretary of the Treasury for international affairs, while speaking in an interview on Charlie Rose, said that there are many additional steps which are needed if Greece has to be put on a sustainable path, which will be a part of an overall framework to make sure that Europe has a much stronger footing.
The new bailout package for the indebted country involves a 130 billion euro package approved by the European finance ministers. The approval for the package came as the authorities tapped in ECB’s profits and convinced investors to give more debt relief to the country. Moreover, a 53.5 percent write down for the investors in the country’s debt is also a part of the deal. The new bailout package hopes to drop the debt burden of the country by 107 billion euros, which is nearly 50 percent of the estimated GDP of Greece for last year.
Brainard said that European leaders are dealing with the challenges of supporting economic growth during a time when many other countries are hoping and making efforts to bring their fiscal deficits down to sustainable levels.
In order to get the new package, Greece has signed to make cuts in minimum wage, pensions, defense spending and healthcare. The country will also make cuts in state employment and asset sales and the country must make the new austerity effective, despite unemployment being more than 20 percent in Greece already.
