Greece reached a preliminary deal Monday for a third multi-billion euro bailout from its fellow members in the 19-country eurozone. Here’s a look at some of the deal’s tough economic measures that Greece will need to pass into law quickly before it can get any new loans.
A statement from the summit of euro leaders said these “minimum requirements” do not guarantee a successful result for the bailout negotiations. The deal calls for Greeks, already reeling from harsh measures and economic decline, to cut back even further in exchange for more loans without which its financial system would surely collapse. The deal, which still needs approval from Greece’s parliament, will be the country’s third bailout in five years.
What Greece must do:
- Request continued support from the International Monetary Fund after its current IMF program expires in early 2016.
- Streamline consumer tax and broaden the tax base to increase revenue. Laws on this are due by Wednesday.
- Multiple reforms to the pension system to make it financially viable. Initial reforms are due by Wednesday, others by October.
- Safeguard the independence of the country’s statistics agency.
- Introduce laws by Wednesday that would ensure “quasi-automatic spending cuts” if the government misses its budget surplus targets.
- Overhaul the civil justice system by July 22 to make it more efficient and reduce costs.
- Carry out product market reforms that include allowing stores to open on Sundays, broadening sales periods, opening up pharmacy ownership, reforming the bakeries and milk market and opening up closed and protected professions, including ferry transport.
- Privatize the electricity transmission network operator unless alternative measures with the same effect can be found.
- Overhaul the labor market. This includes reviewing collective bargaining, industrial action and collective dismissal regulations.
- Tackle banks’ non-performing loans and strengthen bank governance.
- Significantly increase the privatization program, transferring 50 billion euros worth of Greek assets to an independent fund, based in Greece, to carry out the privatizations.
- Modernize, strengthen and reduce the costs of Greek administration, with a first proposal to be provided by July 20.
- Allow members of the three institutions overseeing Greece’s reforms — the European Central Bank, IMF and European Commission, previously known as the ‘troika’ — to return to Athens. The government must consult with the institutions on all relevant draft legislation before submitting it to public consultation or to parliament.
- Re-examine, with a view to amend, legislation passed in the last six months that is deemed to have backtracked on previous bailout commitments.
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To get to a deal, Greek Prime Minister Alexis Tsipras had to overcome the fundamental mistrust of many of his allies among the 18 other countries that use the euro, known as the eurozone. Just a week earlier, at his urging, Greeks had voted in a referendum to reject many of the measures he agreed to Monday, and the deal forced him to renege on many of his election promises.
“We managed to avoid the most extreme measures,” Tsipras said. “Greece will fight to return to growth and to reclaim its lost sovereignty.”
Associated Press wires