Why Did It Take So Long For The Bailout Plan?
Eurozone leaders have approved an unprecedented 110 billion euro emergency loan package for Greece, after its spiralling debt threatened the monetary stability of the entire currency block. FRANCE 24 takes a closer look at the crisis.
After three months of haggling and delays, eurozone countries have finally agreed on a multi-billion dollar aid package to help Greece fight its crippling debt and deficit burden.
The bailout is unprecedented in European history, with the total aid package reaching a whopping 110 billion euros (145 billion dollars), 30 billion of which will be provided by loans from the International Monetary Fund (IMF). That leaves 80 billion euros to be paid out by EU member states over the next three years.
In exchange, …show more content…
But EU finance ministers did not reach an agreement on the main outline of an emergency aid plan until late March. On April 11, EU leaders finally approved a massive European bailout mechanism in addition to IMF loans, which Greece formally submitted a request for on April 23.
Why did it take so long for the bailout plan to be adopted?
The EU’s capacity to take swift and efficient action was sorely tested by the Greek crisis. German Chancellor Angela Merkel long resisted emergency loans, largely because of fierce German public opposition to the bailout before a key election on May 9 in the state of North Rhine-Westphalia. But German reluctance is not solely to blame, and the length and bitterness of the negotiations has shed light on differing national interests within the EU block.
What are the terms and conditions of the aid …show more content…
Crucially, the first aid package is due to be delivered before May 19, in time for Athens to make an 8.5 billion euro debt repayment to its major creditors. Eurozone partners and the IMF will effectively cover Greek credit requirements for the next three years at an interest rate of 5 percent per year, which is far lower than the market rate. Greece has until 2014 to bring its deficit to under 3 percent of GDP to meet the criteria of the EU stability pact. The IMF has been charged with checking that Greece meets the strict 3-month targets drawn up in the bailout plan, with Athens facing sanctions if it doesn’t respect these
After three months of haggling and delays, eurozone countries have finally agreed on a multi-billion dollar aid package to help Greece fight its crippling debt and deficit burden.
The bailout is unprecedented in European history, with the total aid package reaching a whopping 110 billion euros (145 billion dollars), 30 billion of which will be provided by loans from the International Monetary Fund (IMF). That leaves 80 billion euros to be paid out by EU member states over the next three years.
In exchange, …show more content…
But EU finance ministers did not reach an agreement on the main outline of an emergency aid plan until late March. On April 11, EU leaders finally approved a massive European bailout mechanism in addition to IMF loans, which Greece formally submitted a request for on April 23.
Why did it take so long for the bailout plan to be adopted?
The EU’s capacity to take swift and efficient action was sorely tested by the Greek crisis. German Chancellor Angela Merkel long resisted emergency loans, largely because of fierce German public opposition to the bailout before a key election on May 9 in the state of North Rhine-Westphalia. But German reluctance is not solely to blame, and the length and bitterness of the negotiations has shed light on differing national interests within the EU block.
What are the terms and conditions of the aid …show more content…
Crucially, the first aid package is due to be delivered before May 19, in time for Athens to make an 8.5 billion euro debt repayment to its major creditors. Eurozone partners and the IMF will effectively cover Greek credit requirements for the next three years at an interest rate of 5 percent per year, which is far lower than the market rate. Greece has until 2014 to bring its deficit to under 3 percent of GDP to meet the criteria of the EU stability pact. The IMF has been charged with checking that Greece meets the strict 3-month targets drawn up in the bailout plan, with Athens facing sanctions if it doesn’t respect these