Greece Agrees to Harsh New Spending Cuts as Lenders Ratchet Up the Pressure

During tough talks this weekend the Greek government agreed to sharp cut backs but failed to avoid default on massive loans. The three main branches of government agreed to cut spending by 1.5 of the GDP. As a part of this agreement lenders will reduce the debt by almost 70%. Between the three parties there is still a large divide over how the new system should be run that could possibly jeopardize the whole deal.

On an international level the heat was turned up by leaders in the IMF, the European Commission and European Central bank in order to get the slow moving Greek government moving. There conditions are that Greece remove over 15o,000 jobs from the private sector and cut supplemental pensions and introduce private-sector wage cuts in order to receive bailout money that Greece needs to avoid default in March.

Tense political talks continue as elections draw closer in Greece. With much of the country upset with current leadership due to the large cut backs required of international monetary aid. The Euro zone is preparing for a large overhaul in the Greek government this spring.

http://www.nytimes.com/2012/02/06/world/europe/greece-fights-on-two-fronts-to-secure-new-bailout.html?_r=1&ref=world

Nicole LeDonne