New Bailout Deal May Temporarily Save Greece
Greek officials have passed new reform laws that will impacts taxes, pensions and labour rules. These new reforms motivated a response from international groups like The European Central Bank (ECB) and the Eurogroup to extend Greece new loans – bailing them out just in time, or at least before they get kicked out of the EU.
Chancellor Merkel, who has been deeply involved in the Greek crisis, stated Friday” we would be grossly negligent, indeed acting irresponsibly if we did not at least try this path.” New reform laws are tough and will affect all citizens.
The new reform laws include a raise in taxes, from 13% to 23% on restaurants food and drink items, taxi fares, and a few selected supermarket products, public transportation and plane and ferry tickets.
The bailout is occurring quickly, allowing Greek banks to reopen starting Monday. Greek citizens, after 3 weeks of no banking service, will now be able to make withdrawals from their accounts, however, there will be limits to how much can be withdrawn per day. Monday’s limit is 60 Euro per day; Tuesday’s is 120; Wednesday’s is 180.
Prime Minister Tsipras, however, had stated that the deal is one in which he does “not believe in.” Tsipras went along with the deal in order to prevent further damage to the country.
PBP note: Unless the EU comes through with another round of bail out funds, this is a continuation of the death spiral for Greece. Even with another bailout, Greece will not survive without serious restructuring away from the socialist policies it is addicted to.