News / Europe

Agreement Reached on Financial Rescue Package for Greece

TEXT SIZE - +

European Union finance ministers are expected to announce the amount of a massive, EU-International Monetary Fund rescue package for Greece, hours after the parties reached agreement on it.

The European Union-IMF rescue package comes with a painful caveat - agreement by Athens to take further austerity measures, notably cutting public salaries, bonuses and pensions and raising taxes.

Greek Prime Minister George Papandreou outlined the details in a nationally televised address Sunday. He said he would do anything to avoid Greece going bankrupt and he urged Greeks to accept great sacrifices.

At a news conference later, Greek Finance Minister George Papaconstantinou said the belt-tightening measures would help his country get back on its feet.

"These measures have a counterpart and the counterpart is the significant financial help through this mechanism that we helped create and which is a step, a big step forward for the European Union," said George Papaconstantinou, Greek Finance Minister. "Through this mechanism and this financial help Greece will be shielded from the international markets and will be able to put its house in order."

In Brussels, finance ministers from the 16 EU nations sharing the euro currency, including Greece, met to give final approval to the rescue package. The final deal is expected to be endorsed by European leaders at a special summit later this month.

As he arrived at Sunday's meeting, EU Monetary Affairs Commissioner Olli Rehn gave a thumbs-up to the new Greek spending cuts.

"The Greek government has today announced a very comprehensive and ambitious economic program which I indeed welcome," he said. "I'm confident that the eurogroup, the euro area member states, will today endorse this program and I'm recommending to the eurograoup today to activate the [aid] mechanism."

The aid deal comes after weeks of negotiations. Eurozone member Germany has been particularly reluctant to endorse an agreement without further austerity measures from Athens.

In Greece, tens of thousands of protesters took to the streets Saturday to register their unhappiness with the belt tightening. Greek unions have called for a national strike on Wednesday.

The Greek government says it has no other choice but to cut spending, faced with the country's skyrocketing public debt and deficit. Last week, ratings agencies downgraded Greece's ratings to junk status.

You May Like

Experts Weigh In on Challenges of Closing Guantanamo Prison

Former chief military prosecutor at Guantanamo delivers petition to White House with more than 370,000 signatures, demanding facility be closed down immediately More

Karzai to Discuss Enhancing Defense Ties with India

Afghanistan looking for more military aid as it prepares for withdrawal of NATO forces by next year More

India, China Pledge to Overcome Border Tensions

Indian prime minister and Chinese premier attempt to move past tense standoff in the Himalayas during Delhi talks More

Burmese President Opens US Visit with VOA Town Hall Meeting

Ahead of his meeting with President Obama Monday, Thein Sein answered questions on human rights and economic development in his country More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Video

Video US Oil Surge Could Impact Mideast Geopolitics

The United States will account for a third of new oil supplies over the next five years, and will become energy self-sufficient in 20 years, according to a new report by the Paris-based International Energy Agency (IEA). Although U.S. oil imports from Arab Gulf countries increased last year, analysts predict the U.S. will lose its dependence on Middle East imports, which is expected to have a huge impact on international relations and the balance of power. VOA's Henry Ridgewell reports.