On Thursday, Greece’s fractions political leaders secured a deal to make large cuts in government jobs and spending. The main aim was to help save Greece from a default that could upset the world financial system. Since July, the deal has been under debate. The deal is one of the two serious steps that the country must take to obtain a bailout fund worth 130 billion Euros. Greece is expected to receive this bailout from other countries in Europe and around the world. On the other hand, numerous euro zone ministers said that the deal needs to go further and give Greece some time to find an additional 325 million Euros in savings. The new austerity measures are expected to rush in the parliament by Sunday.
Greece is also very close to a concord with private investors who hold approximately two-thirds of its debt to stridently lessen its borrowing costs. The euro zone nation needs the bailout by March 20th in order to have adequate money to redeem 14.5 million Euros worth of bonds coming due. If Greece doesn’t make the payment it will be in default. As a result of the bailout, some of the uncertainty in Europe will settle down. Greece is still in a deep recession. The unemployment rate in Greece is estimated to be nearly 20.9 percent. Meanwhile, its government finances and its economy are being hauled downward by expensive political support, unique protections for some special trades and tax skirting. In a statement, a senior fellow at the Brookings institution, Domenico Lombardi said that Greece will not be able to pay off its debt for year to come.
Adding further, he said that the ranges of the problems that have to be handled in Greece are very massive and so deep-rooted. On Thursday, the deal which Greek leaders made incorporates a 22 percent slash in the monthly minimum wage to €586, layoffs for 15,000 civil servants and an end to numerous job security provisions. On the other hand, the debt ridden country is also close to essential debt relief deal with hedge funds, private investors, financial institutions and pension funds.
