Poverty Stricken Greece Agrees to Implement New Reforms in Hope of a New Bailout

The EU and international creditors are pressuring Greece to agree to a new set of reforms

Greece’s economic woes continue, as the country struggles to implement new measures imposed by the EU and its international creditors. Since the outbreak of the biggest economic crisis in known history, Greece has lost almost a fifth of its GDP and seen a massive increase in unemployment and poverty.

Creditors have conditioned a bailout program upon austerity based reforms aimed at increasing tax revenue and reducing public spending. But the results are defeating: thousands of Greek citizens have lost their jobs and many struggle to survive.

Senior officials from the European Commission, the European Central Bank (ECB), the IMF and European Stability Mechanism will meet in Athens to negotiate the next transche of Greece’s €86bn bailout.

The bailout program is aimed at stabilizing the Greek economy and shielding the EU – and the international creditors, from the danger of Greek economic collapse. Greek debt crisis, ongoing since 2009, has escalated in 2015, threatening the financial stability of the Eurozone and causing fears of a new global economic crisis.

Yet more austerity measures promise a bleak future for the Greeks, already severely affected by the years of austerity. Pensions have already been cut several times, while there was a significant tax increase. This led to a protracted economic stagnation and a dramatic reduction of living standard.

Currently, Greece has the second largest sovereign debt in the world – €226.36bn, which amounts to 173.4% of the GDP. The bad news is that, despite the far-reaching austerity measures, debt has increased by €2.65bn, according to data from the Greek finance ministry.

A fresh round of €7.4bn debt repayment is due in July this year, making the success of the bailout agreement of essential importance for the country’s financial stability.

Harsh economic situation has left its mark on Greece, a fact supported by numbers. Over 75 percent of households suffered a significant income reduction in 2016. A growing number of people is struggling to pay bills, and many are forced to collect monthly food handouts.

Greek Prime Minister, Alexis Tsipras, has said that he will not accept more austerity beyond what Athens has already agreed. The current bailout program of €86bn was agreed upon in 2015 between Greece and European creditors, by which Greece was obliged to increase taxes and health contributions by pensioners, as well a retirement age increase to 67.

The July 2015 agreement was Greece’s 10th overall austerity package, followed by further measures in 2016 that introduced additional pension cuts.

Source: The Guardian

Image: ZCommunication