Greece signed a historic agreement on bailout deal with the Eurozone. This deal was much needed for Greece to be a part of euro.
Prime Minister Alexis Tsipras agreed to harsh reforms after long negotiations in return for a 3 year bailout worth up to 86 billion euros (USD 96 billion).
This is Greece’s third bailout programme in 5 years.
Greek banks have been closed for nearly two weeks and there were fears they were about to run dry due to a lack of extra funding by the European Central Bank.
In the absence of bailout Greece would have had to print its own currency and effectively leave the single currency.
- 2010 – 110 billion euros
- 2012 – 130 billion euros
What happens now?
- According to the agreement, Athens will now have to rush through new tough reform laws by Wednesday.
- Greece has to introduce harsh conditions on labour reform and pensions, VAT and taxes, and measures on privatisation.
- Greece will also park assets for privatisation worth up to 50 billion euros (USD 56 billion) in a special fund which will be used to recapitalise Greece’s cash-starved banks.