EU Signs $96 Billion Bailout of Greece

     (CN) – The European Commission on Thursday signed off on the EU’s $96 billion bailout of Greece – the nation’s third in five years – after parliaments across the continent approved the deal earlier this week.
     Eurozone members tentatively agreed to bail out the Hellenic Republic again last month, in a shaky deal that hinged on Greek Prime Minister Alexis Tsipras delivering key reforms – including a complete overhaul of the nation’s civil justice system, pension reform and income and sales tax increases.
     Days later, Greek lawmakers raised the retirement age to 67 and passed sweeping tax reforms amid anti-austerity protests and public-employee strikes across the nation. In exchange, the European Commission cut Greece a check for $7.8 billion as a bridge loan to reopen banks that had been closed for weeks and to avoid a default on the previous bailouts.
     On Thursday, the commission said Greece had either completed or committed to enough of the reforms required by eurozone members to sign off on the three-year, $96 billion bailout.
     “This deal shows that all sides are delivering and that mutual trust is being restored,” commissioner Miguel Arias Canete said. “Now it is time for implementation and follow-up and the commission stands ready to help more with technical expertise and support from the European Union funding.”
     The first tranche of the bailout – $29 billion – will recapitalize Greek banks and stimulate the nation’s economy. Some of the money will also cover the Greek government’s current needs since the latest downturn in the nation’s economy decimated state coffers, the commission said.
     Future funding will go to privatizing assets and markets currently held by the government and tackle the problem of nonperforming loans in the banking sector.
     The International Monetary Fund joined the EU in funding the previous Greek bailouts – $33 billion under a stand-by arrangement in 2010 and just under $22 billion in 2012. But while the IMF will continue to act as an official monitor of Greece’s progress in the latest go-round, whether it provides additional funding will depend on Greece completing the required reforms and an agreement on debt relief, the commission said.
     European nations gave Greece nearly $206 billion in the first two bailouts, a figure commission president Jean-Claude Juncker said exceeded the international financing “all of Europe received from the U.S. Marshall Plan after the Second World War.”
     Juncker also pushed for the latest bailout to be socially fair, and has tasked the commission with making sure Greece returns to stability “in a financially and socially sustainable way.”
     To achieve that, the commission said it will push Greece to implement a minimum wage and universal health care, eliminate favorable tax treatment and fight fraud, corruption and government waste and abuse.
     Employment commissioner Marianne Thyssen said that for the first time, the latest bailout “assesses the social impact and makes sure it is socially fair and protects the most vulnerable throughout.”
     The bailout runs through August 2018.
     Tsipras said Thursday he will resign and called for snap elections to be held in September.
     

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