Eurozone finance ministers dismissed as incomplete a Ã¢â€šÂ¬3.3bn package of Greek budget cuts necessary to secure a Ã¢â€šÂ¬130bn bailout for Greece.
Greek finance minister was given a new set of demands and an urgent deadline, February 15th. The lenders are demanding from Greece Ã¢â€šÂ¬325m in further cuts to this yearÃ¢â‚¬â„¢s budget, parliamentary approval of a comprehensive reform package and a pledge from the countryÃ¢â‚¬â„¢s political leaders to maintain their commitment after April elections. They also demand to improve the countryÃ¢â‚¬â„¢s tax collection and accelerate the sale of state-owned assets.
If those conditions were met, Eurozone finance ministers would meet again on Wednesday, February 15th to sign the loan agreement, and move ahead with a private sector bond swap, which is expected to cut some Ã¢â€šÂ¬100bn from GreeceÃ¢â‚¬â„¢s Ã¢â€šÂ¬350bn debt.
Through the loan package and bond swap, GreeceÃ¢â‚¬â„¢s lenders are trying to lower the countryÃ¢â‚¬â„¢s debt-to-GDP ratio to 120 per cent by 2020.
However, the Ã¢â€šÂ¬130bn limit and a target to reduce GreeceÃ¢â‚¬â„¢s debt to 120 per cent were both agreed in October, but as Eurozone and IMF officials have said, GreeceÃ¢â‚¬â„¢s economic conditions have gotten worse significantly since then, meaning more bailout cash and more debt reduction will be required than originally anticipated.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.