A DONE DEAL? THE NEXT STEPS FOR THE GREEK BAILOUT PLAN
It’s all in the detail
Greece’s government must persuade international lenders that it has detailed €325m of additional cuts, on top of existing measures – and that its political leaders pledge to carry out the austerity reforms.
Private bond holders await
A deal for private debt holders to take a 70 per cent haircut has been discussed already – yet not finalised. A deadline of 17 February has been mentioned, yet last month an earlier deadline was set – for yesterday. That deadline was ignored.
Going global with the IMF
In faraway Mexico City, ministers and central bank chiefs from the G20 are expected to meet. If the Eurozone has pledged more funds the bailout, IMF boss Christine Lagarde may raise more funds from outside the euro area.
1 March – a deal is due
EU leaders are scheduled to hold a summit on 1 and 2 March, at which point a final arrangement would need to be signed off by all parties, merely three weeks prior to the most threatening date of all…
Tomorrow – Eurogroup meeting
If all goes as planned, ministers of finance from Eurozone countries will gather again tomorrow. A final deal with private debt holders will not be established, but the Eurogroup will be aiming to agree to the deal “in principle”.
Is it sustainable? Troika decides
The troika – made up of the European Union, European Central Bank and IMF – must decide if the bailout, combined with reforms, would put Greece on a sustainable footing. Debt is required to dip to equivalent of 120 per cent of GDP.
German paymasters set to vote
On 27 February the Bundestag, the lower house of the parliament in Germany, will discuss the plan. Many Germans are unhappy with the government being demonised in Greece, despite taxpayers coughing up for the rescue fund.
…Doomsday? 20 March 2012
Much of the panic over the Greek situation is caused by this nearing deadline. If Greece fails to pay out €14.5bn in bond redemptions on this date then it will officially default, potentially leading to contagion throughout the Eurozone.