European Union Partners seek assurance from Greece before second bailout

Finance Ministers of the 17-nation euro zone arrived in Brussels for talks about Greece’s second international bailout in two years. Though the Greek political leaders were ready to settle for a deal that required harsh austerity measures and reforms from the country, their international backers weren’t too convinced.

European Union partners and International Monetary Fund feel they have good reason to do so after a series of broken promises from Greece. EU Economic and Monetary Affairs Commissioner Olli Rehn said the Greek government had to prove through its concrete actions to its European partners that the second bailout will work. The euro zone warned that there will be no approval for the second program, unless Athens proves itself.

Greek Finance Minister Evangelos Venizelos, Prime Minister Lucas Papademos, leaders of the three coalition parties and chief EU and IMF inspectors discussed various issues but the pressing and sensitive issue of pension cuts was left unsolved. But, a 300 million euro gap was bridged that night. Ministers present were firm on their belief that Greece needs to promise practical action and it should follow through with implementation.

The reforms that the country readily agreed to will cause big changes in the standard of living of the Greeks. The country’s two major labor unions called for a strike against these reforms. Greece is already in its fifth year of recession and these austerity measures will cause the minimum wage to fall by 22 percent.

International lenders are also asking for full implementation of pay and pension cuts and structural and administrative reforms. Greek leaders aren’t too happy to agree to these tough terms but they see no other way out. Though the leaders mean well and want to put the ordinary people first, these decisions will not go well with the voters. Editorials and other media have already started to criticize the reforms.

Greece is in no better place than it was during its first bailout in 2010. It has plunged in to deeper recession since then. The unemployment figures are causing deep ripples with 20.9 percent and the youth employment adds up to 48 percent. Its devolving industrial output is a reflection of the country’s economic condition.

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