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Greek Official Says Deal Reached With E.U. on Bailout Overhauls Greece Reaches Bailout Deal with International Creditors
(about 1 hour later)
A Greek official said on Tuesday that his country had reached a deal with its creditors that would allow it to receive critical emergency funds in return for promises to raise taxes and cut social spending. Greece and its international creditors said on Tuesday that they had reached a preliminary deal allowing the country to receive critical bailout payments in exchange for promises to raise taxes and cut social spending.
The agreement, the culmination of six months of talks between Greece, the European Union and the International Monetary Fund, was seen as essential to avoid a fiscal meltdown in Athens, where the government faces a 7 billion euro, or about $7.6 billion, debt repayment in July. The agreement — the culmination of months of talks — paves the way for the transfer of 7 billion euros, or about $7.6 billion, of emergency funds to Athens. It also comes ahead of a series of elections in Britain, France and Germany in the coming months, with European officials eager to head off a full-blown crisis to avoid giving fuel to far-right parties.
Under the agreement, Greece will make changes to its labor and energy markets, cut pension payouts and increase taxes, Greece’s finance minister, Euclid Tsakalotos, told reporters, according to Reuters. Under the terms of the agreement, which still needs to be approved by eurozone finance ministers, Greece will make changes to its labor and energy markets, cut pension payouts, and increase taxes, the country’s finance minister, Euclid Tsakalotos, told reporters, according to Reuters.
“There was white smoke,” Mr. Tsakalotos was quoted as saying, alluding to the method used by the Vatican to signal an agreement in the selection of a new pope. The Athens News Agency quoted him in a similar way.“There was white smoke,” Mr. Tsakalotos was quoted as saying, alluding to the method used by the Vatican to signal an agreement in the selection of a new pope. The Athens News Agency quoted him in a similar way.
“The way has now been paved for debt relief talks,” he said, according to Reuters.“The way has now been paved for debt relief talks,” he said, according to Reuters.
Pierre Moscovici, the European commissioner for economic and financial affairs, said in a statement that the deal was “a very positive development.”
“It is time to turn the page on this long and difficult austerity chapter for the Greek people,” he said. “With this agreement, we need now to write a new story of stability, jobs and growth for Greece and for the euro area as a whole.”
Further discussions will include ways of decreasing Greece’s debt.Further discussions will include ways of decreasing Greece’s debt.
The preliminary agreement marks the latest step in a yearslong crisis for Greece.
The country’s debt first became an issue during the global financial crisis, and it has relied on bailouts since. In return, Athens has had to push through painful austerity measures to reduce the debt, which stands at 180 percent of gross domestic product.
That has resulted in hefty cuts to pensions and benefits for ordinary Greeks, as well as efforts to increase the number of people in the country who pay taxes.
But the measures have hit Greece’s economy hard — unemployment is above 25 percent, and the economy has shrunk by a fifth since the financial crisis.