Another day… another missed deadline. Or dodged, that is.
And it’s no surprise to see that Greece is the culprit.
With March 20 looming large as the date by which Greece must pay back 14.4 billion euros ($19 billion) worth of loans to private lenders, the pressure on the country’s leadership just got cranked up a few notches.
At the moment, it simply can’t afford to pay back those loans, meaning that it will default on its debt by March 20 if it hasn’t got the money by then.
To raise such a Parthenon-sized sum of money, the three-party Greek coalition government must agree on tough new austerity measures before the European Union and International Monetary Fund will give it 130 billion euros ($171 billion) in new bailout funds.
Trouble is, the Greeks can’t agree and negotiations broke up on Sunday evening without a deal in place. That’s bad news for European officials who’d hoped to finalize a deal today, and they’ll now have to wait until Tuesday before negotiations resume. They’re getting irritated, to say the least…
Europe Despairs, As Greece Haggles Over Austerity Measures
Leading the band of brassed-off bureaucrats is French President, Nicolas Sarkozy:
“Greece’s leaders have made commitments and they must respect them scrupulously. Time is running out, it needs to be concluded once and for all. It needs to be signed.”
Clearly, this is easier said than done, especially with Greek livelihoods on the line. Among the austerity measures proposed:
- Around 15,000 more civil service layoffs.
- A 20% to 30% cut in the 750-euro ($985) per month minimum wage.
- An end to holiday bonuses – equal to an extra month’s pay.
- Cuts to pension plans.
- Cuts to government spending, equaling 1.5% of GDP.
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Thanks to the anti-austerity protests planned for Monday evening and Greece’s two largest unions calling for an immediate strike on Tuesday, a few of these measures are under review. And a tentative agreement has the minimum wage cut by 20% rather than the higher 30%, while retaining the holiday bonus.
I must say, I feel sorry for the ordinary citizens of Greece, most of whom aren’t to blame for the debt-ridden mess in which the country finds itself, but are nonetheless either losing their jobs, or being forced to accept drastically lower pay and pensions.
Indeed, the facts make for a pretty disheartening read.
The latest political to-and-fro comes as the EU reported that Greece’s debt ballooned to 159% of GDP during the third quarter of 2011. That was up from 154% during the second quarter and from 138% in the third quarter of 2010.
That’s a long way off the ultimate goal of getting the debt down to 120% of GDP by 2020.
With European officials already riled up over Greece’s continued failure to get a deal done – one that would trigger a eurozone-saving bailout – the situation could get ugly on Tuesday if they don’t come to an agreement.