Eurozone demands Greek austerity for aid
Greece has been handed an ultimatum from the eurozone to approve stark new austerity measures to return its finances to order within two weeks, or forego the next tranche of its bailout aid.
Eurozone finance ministers have given Greece’s leaders and society until July 3 to push through strict new spending cuts, tax hikes and privatisation measures in order to receive the next €12bn (£10.6bn) of European Union and International Monetary Fund aid.
The finance ministers’ decision follows two days of meetings but runs counter to days of strikes, riots and anti-austerity protests across Athens as Greeks and opposition parties increasingly oppose the unpopular plans.
“The approval of the Greek parliament is absolutely essential and it will have to arrive in a timely fashion so we can take a decision on July 3,” said Jean-Claude Juncker, who chairs the Eurogroup of the 17 euro zone finance ministers.
“It is clear that the (Greek) debt is sustainable, but the debt will only remain sustainable if Greece fulfils all its commitments which it agreed with the troika,” he told reporters, referring to the EU, IMF and European Central Bank.
Greece’s newly appointed finance minister, Evangelos Venizelos, issued a statement shortly before Juncker spoke saying he would strive to ensure the already reworked austerity package was approved.
Greece risks defaulting on its debts if the next tranche, the fifth instalment of €110bn of loans agreed with Athens in May 2010, is not released in time.
“The overriding aim is to develop a clear relationship of trust, to stabilise the situation, to have a disbursement of the fifth instalment,” Venizelos said.
“The political time has been compressed a lot. Each day is of extreme importance and hence we cannot afford to waste a single hour.”