The Economy

Greece: Compromises Lead to Four-Month Extension

A new compromise deal to extend the euro zone bailout is approved by European finance ministers.
Katie Kuehner-HebertFebruary 24, 2015
Greece: Compromises Lead to Four-Month Extension

Greece can now essentially phase-in its new anti-austerity measures, but in return for continuance of the bailout by the European Union it had to offer a host of concessions.

A Reuters story Tuesday said that euro zone finance ministers have approved a compromise plan proposed late Monday by the recently-elected Greece government under Prime Minister Alexis Tsipras. The plan paves the way for a four-month extension to Greece’s bailout program.

“The Eurogroup teleconference is over and the Greek reform plan was approved,” a Greek finance ministry official told Reuters.

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Several euro zone countries, including Germany and Finland, need to vote on the deal, but it is expected to be passed, Reuters wrote.

The left-wing government’s proposal includes promises not to roll back any ongoing or completed privatizations; to ensure that any state spending to address years of economic hardship does not hurt its budget; to phase in collective bargaining and possible minimum wage increases over time instead of immediately; to reform the public sector wage system; to reform tax policy; and to control spending in “every area” of government, according to Reuters.

The new government would also avoid interfering in banking operations, in an effort to ensure that its banks would “run on sound commercial and banking principles,” Reuters wrote.

Athens also said it would also eliminate loopholes and incentives for workers to retire early.

Source: Reuters