Brussels- Yesterday Greece’s coalition political leaders in Athens reluctantly accepted a last minute deal to go along with an EU austerity package that included 300 million in pension cuts.
Later in the day, Greek Finance Minister Evangelos Venizelos flew to Brussels to meet with EU and IMF finance ministers. During the meeting, Minister Venizelos was told that Greece’s austerity deal was simply not good enough to assure Greece’s creditors to disburse the 130 billion bailout in March.
Considering Greece’s poor track record of meeting financing targets, Greece’s poor tax collection system, and loose government spending habits, it is not surprising that EU finance ministers issued three new conditional demands on Greece that are required for the country to receive its large EU bailout package.
The three new conditions for the bailout includes the following:
1) Greece’s Parliament voting to accept the austerity package on Sunday. A “no” vote in parliament could essentially result in a fast track ticket on the Euro Express out of the Euro for Greece.
2) 325 million in additional spending cuts.
3) Written guarantees from lawmakers in Athens that affirms the EU bailout deal won’t change after elections with the emergence of a new government.
With the growing prospect of more strikes and cuts in wages, pensions, and government spending, Greek Finance Minister Evangelos Venizelos acknowledged that Greece’s upcoming parliamentary vote on Sunday is a vote for continued euro membership.
Jean Claude Juncker, who heads the group of EU ministers, insisted that there would be “no disbursement before implementation.”
Speaking before reporters, Junker explained, “We can’t live with this system while promises are repeated and repeated and repeated and implementation measures are sometimes too weak.”
EU finance ministers are currently demanding greater oversight of Greece’s budget plans.
If the Greek parliament vote is approved on Sunday, EU finance ministers will meet on Wednesday February 15th and approve a write down of Greek bonds by private bond holders along with greater oversight of Greece’s budget.