EU to dictate Greece’s austerity measures
Share
The 16 members of the eurozone will decide Greece’s fate next month and will not allow the country to have a vote on the outcome.
According to the Telegraph, the Greek government must comply with strict austerity measures set by the nations by March 16. If it does not the other eurozone countries may take control of the Greek economy. The report says this is the first time members of the single currency have decided on such draconian measures.
Greece has already submitted plans to reduce its deficit from 12.7 per cent of GDP to less than 3 per cent of GDP in three years. It hopes to reduce it by 4 per cent of GDP in 2010.
According to Euro news wire Euractiv, the eurozone members think the submitted plans do not go far enough in solving the Greek debt crisis. EU commissioner for economic affairs, Olli Rehn says: “There is a clear case for additional measures”.
BNP Paribas estimates that the eurozone may have to give Greece as much as a €50bn lifeline. Head of inflation economics Luigi Speranza says the bailout would have to be enough “to effectively calm the market concern”.
Reports suggest the lash-back is being led by the Germans, who are unhappy that they may be forced to offer Greece such a large bailout. According to Bloomberg, the head of the business caucus for the leading Christian Democratic Union Kurt Lauk says Greece should be severely punished for any financial aid.
Lauk says: “If a country is in receivership, I think we need to introduce a rule that they are not allowed to vote while they’re in receivership in the council or on any other issue.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
