By: Dr. Mike Campbell
Last week, Greece’s government failed to agree on pension reforms required by the EU/IMF as conditional upon granting a fresh €130 billion bailout package. At the last minute, the Greeks were able to cobble together a deal to offer EU partners, but in an unusual twist on the “euro-sceptic” theme the plan was turned down. Greece was asked to find an additional €325 million in cuts by EU finance ministers and more concrete measures were required. Greece has come under criticism in the past for failing to honour all of the promises made when the first bailout was agreed.
The Greek PM, Lucas Papademos, appealed to the nation to back the EU/IMF deal and accept further austerity measures in order to secure the second bailout ahead of a parliamentary vote on Sunday. He warned that the nation was faced with a stark choice between taking the loan and agreeing to further austerity measures or chaos. In the course of a televised interview, he made some stark statements: "This program will secure the conditions of safety (and) confidence and restore the competitiveness of our economy. It will see the country return to growth, probably in the second half of next year. This agreement will decide the country's future. We are just a breath away from ground zero. A disorderly default would set the country on a disastrous adventure. Living standards would collapse and it would lead sooner or later to an exit from the euro." He cautioned that failure to pass the bill and secure the loan "would disrupt imports or fuel, medicine and machinery."
The vote was passed with a comfortable majority, but Greeks took to the streets to protest against further cuts, resulting in rioting and destruction of property, The Greek government will be required to agree that the cuts will be implemented irrespective of which party wins a snap general election which has been called for April. If all conditions are met, the new loan could be approved on Wednesday.