On the 21st of February 2012 Eurozone Ministers agreed to give Greece a second bailout of €130 bn. The new agreement prevents Greece from falling into bankruptcy on the 20th of March 2012 as it allows the country to begin repaying its maturity loans.
The talks began on Monday afternoon and took all night. The importance of the decision is being underlined by the long overnight talks that took place on Monday in Brussels. After 14 long and stressed hours a decision was made.
As mentioned by Guardian on the 21st of February, when commissioner Rehn was asked about the long late talks concerning this issue he responded, “Marathon is a Greek word…I learned that the past two years”. His response indicates that the overall procedure concerning Greece’s bailout has been a long and hectic one.
According to Guardian, the Chairman of Eurozone Finance Ministers, Jean-Claude Juncker announced the new deal around 4:20 am GMT. The agreement states that Greece will be provided with €130 bn and a €107 bn write-off debt.
After the closing of the deal the Greek Prime Minister, Lucas Papademos, mentioned in the press conference that this is a “historic day” for Greece.
Also, the Greek Finance Minister Evangelos Venizelos, commented that the new agreement has prevented a “nightmare scenario” for Greece and allowed the country to avoid an exit from Eurozone.
The new agreement states that Greece should cuts its debt from 160% to 120.5% within the next 8 years and be in a position to follow the economic monitoring charges that will be forced by EU.
The country’s next step is to begin negotiations with its private creditors concerning the terms of the paying package.
Despite the positive decision and the willingness of Eurozone Finance Ministers to help Greece out, there is still a lot of hesitation and concerns about whether Greece is in a position to manage this amount better and allow the country to commence recovery.
The Dutch Finance Minister mentioned during talks that Troika representatives should be sent to Greece permanently to supervise the country’s budgets and make sure that Greece follows the instructions set by Eurozone.
Furthermore, Troika presented a report during the meeting regarding Greece’s failure to reach its previous targets concerning bailout, an indicator which does not provide the most encouraging signs for the future.
The Guardian newspaper quoted parts from the report presented during the meeting showing the reluctance of Troika. One of them states that, “Given the risks, the Greek program may thus remain accident-prone with questions about sustainability hanging over it”.
The overall result of the meeting left most EU leaders to maintain their positive attitude concerning the new agreement and shows Eurozone willingness to offer a last opportunity to Greece.
By: Natasa Toumazou
HGN Politics Journalist, London Campus