Greece agrees bailout measures

9 Feb 12
Greece’s political leaders and its creditors have reached ‘general agreement’ on the programme of austerity measures the country needs to introduce to secure a new €130bn (£110bn) bailout.

By Nick Mann | 9 February 2012

Greece’s political leaders and its creditors have reached ‘general agreement’ on the programme of austerity measures the country needs to introduce to secure a new €130bn (£110bn) bailout.

The announcement today by Greek Prime Minister Lucas Papademos comes after days of talks involving three of the partners in the country’s ruling coalition and the trio of creditors known as the ‘troika’. This group involves the European Central Bank, the European Union and the International Monetary Fund.

It was made ahead of an extraordinary meeting of the Eurogroup of eurozone finance ministers being held this evening in Brussels. At the meeting, ministers are expected to decide whether to approve the plan so Greece can receive the bailout loan.

In a statement, Papademos said: ‘The government’s discussions with the troika were concluded successfully this morning on the issue which had remained open for further elaboration. The political leaders have agreed on the result of these discussions.

‘Thus there is general agreement on the content of the new programme, in view also of this evening’s Eurogroup meeting. This programme accompanies the new loan agreement to finance Greece with €130bn.’

While the Greek government has yet to publish details of the deal, it is understood that it has agreed to make €3.3bn of additional savings this year to secure the latest bailout. Public sector job cuts and a reduction in the minimum wage are reported to be among the measures involved.

Greece needs the bailout loan to help it meet repayments to private creditors due next month, which are believed to be worth around €14.4bn. If the deal is formally agreed, it is also set to receive a write-off of some of its debt to private banks.

Arriving for the Eurogroup meeting, IMF chief executive Christine Lagarde said the news from Greece was ‘very encouraging’. ‘After the very heavy-duty work there’s been recently, it’s clearly positive,’ she added.

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