Monday, February 20, 2012
http://www.nytimes.com/2012/02/21/business/global/european-ministers-are-poised-to-approve-greek-rescue.html?_r=1&hp
After months of tense negotiations, euro zone finance ministers were poised Monday to bring Greece back from the brink of default through an agreement to a second giant bailout in exchange for severe austerity measures — and subject to strict conditions.
Subscribe to:
Post Comments (Atom)
3 comments:
This bailout still requires bondholders to take heavy losses on their investments, but I never read that bondholders and the Greek government had come to a deal. I wonder if I just missed this news, or whether the E.U. and Greece assume that bondholders will take the cut given to them since this appears to be the end of the road, and the current payout (which I believe is slightly under 50%) is the most that bondholders can hope to get.
With Greece’s excess debt, poor economy, and threats that they bring to Europe’s recovery and future, it would be ridiculous to not have some plan for them even if it is not their ideal solution. Austerity measures will control and prioritize their debt repayment, support global growth, and stabilize their financials by lowering their spending and reducing their benefits. Even though Greece may lose some of their national sovereignty or control due to permanent monitoring and implementing, a bailout is definitely in need for Greece. If the euro zone didn’t decide to step in, changes may never occur for Greece. This could then lead to even more debt and a terrible economy in the future for Greece.
I agree with Lauren and the severity of these measurement is deserved since this is their second bailout. Establishing new regulations as a learning lesson from this will as well benefit the Euro Zone so that there are proper set measures to take if something of this nature may happen again.
Post a Comment