Greek Debt Crisis

Euro finance ministers expected to approve Greek bailout

Stephen Beard Feb 20, 2012

Adriene Hill: European finance ministers are meeting in Brussels today. They’re expected to finally approve a new bailout loan package for Greece. The price tag: $170 billion.

For more we go live now to Stephen Beard. Good morning.

Stephen Beard: Hello Adriene.

Hill: Is this bailout deal finally gonna happen? We’ve been flirting with it for weeks now.

Beard: As you say, given all the previous false dawns, I’m reluctant to say this is it. But the French finance minister says there should be a deal today. It does look as if the EU and the IMF will now approve the loan package for Greece so it can stave off a possible default in March.

Hill: So this is it? Ta-da. Wipe our hands — this is the end of Greece’s debt crisis at long last?

Beard: No. If the deal is approved today, the Greeks will get enough cash to tide them over until the end of March, but there could be further trouble after that. The Greek government has had to agree to some very painful budget cuts for this — cuts in pensions, cuts in public sector jobs; 150,000 jobs are going to have to go. These are extremely unpopular in Greece.

And as Georg Grodski of Legal and General Investment points out, there’s a general election in Greece in April.

Georg Grodski: In a few weeks time, we may have a completely new government in Greece — certainly we will have a new parliament. And right now, very far-right and far-left wing parties are gaining strength, and they would probably revoke any agreement.

And with that in mind, the EU and the IMF are said to be insisting that the bailout money is paid into an escrow account, and only released in dribs and drabs. So the Greek debt crisis may now cross a dangerous hurdle in March, but it certainly isn’t over.

Hill: So you and I will be talking a lot.

Beard: I’m afraid so.

Hill: Marketplace’s Steven Beard in London, thanks.

Beard: OK, Adriene.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.