A confidential International Monetary Fund study seen by Reuters showed Greece will need far greater debt relief than euro zone countries have been prepared to envisage even a couple of weeks ago, because the economy has deteriorated so severely due to a two-week bank closure.
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Back in Germany, Monday’s agreement was greeted with scepticism amid concerns as to whether Greeks would deliver on their side of the bargain and ram the reforms, which include revamping Greece’s tax and pensions systems, through parliament.
Countries that have been through economic crises, like Spain, are also taking a tough position on Greece since they did the hard work of reducing their own debts through painful spending cuts.
Greece’s parliament is expected to vote Wednesday on the austerity bill required to get a new bailout package.
Dombrovskis says the eurozone’s integration efforts since then are having a “positive” effect.
The rescue – Greece’s third since 2010 – should secure its place in the euro, for now.
The Greek vote was “a slap in the face for all Europeans”, said the Federation of German Industry, with Germany’s powerful business sector having argued that Greece’s euro membership could be sacrificed for the sake of a stable currency.
European leaders have issued Greece with its final ultimatum: accept our demands or leave the currency for five years.
Some, like Athens resident Sandra Demertzis, likened Eurozone finance ministers to criminals who had no real interest in helping the Greek people restore their economy.
Greece’s Alternate Finance Minister Nadia Valavani has resigned from government in protest over the austerity measures the country is asked to implement in exchange for a bailout.
“Of course there will be the usual suspects in the conservative bloc who already voted against Greek bailouts in the past”, he said.
European leaders and Greek government agreed on a conditional bailout deal on Monday, after more than 17 hours of negotiations in Brussels, with the hope of preventing the EU member state from going bankrupt, and leaving the eurozone.
Europe has offered Greece a new $96 billion bailout after its government agreed to enact deep economic reforms under close supervision by its creditors.
“Other countries might now know that is an option if they hold out negotiations”. In a more recent poll, 10 percent of Germans said they supported more concessions to Greece, the Wall Street Journal reported.
German-based Spiegel Online said: “What happened in Brussels over the weekend was the return of Europe back to power structures of the 19th and early 20th century, in which the stronger forced its will upon the weaker”.
German lawmakers will be recalled from recess on Friday to authorise the opening of loan negotiations with Athens once the Greek parliament has approved the programme.
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Dijsellbloem says ministers are looking at all possible instruments and funds but all have “disadvantages or impossibilities or legal objections”.
