greek problem, page-2

The Greeks will vote for the austerity plans next week.

In return for agreeing to the austerity plans, the EU will pump Billions of Euros in infrastructure spending into Greece!

They cannot afford to let any EU country fall to the wayside!

The EU has come back and offered Greece a lifeline in return for taking the difficult decisions earlier this week and accepting the austerity measures.

They have given them access to Billions in infrastructure development fund which will allow the Greek economy to grow and offset some of the slowdown this next batch of austerity measures will cause.

The austerity measures will ensure Greece?s Fiscal Debt to GDP reaches the target set by the EU, and this stimulus will ensure the economy grows, which will invariably improve the calculation!

The Europeans know that they must help all the nations in the Euro, but they had to ensure Greece does the right thing and gets their fiscal house in order!

This will be seen as a blueprint for the other PIIGS, that as they get their houses in order, the Germans and French will come up with a sweetener for them!
Cheers Nectar

Greece gets access to development funds

By Gabriele Steinhauser
From: AAP
June 24, 2011 12:14PM

THE European Union said it would help Greece access billions in EU development funds in an attempt to boost the country's struggling economy and sweeten unpopular austerity measures ahead of a tight parliamentary vote.

European Commission president Jose Manuel Barroso said that the EU was prepared to reduce the amount of money Greece has to come up with to co-fund projects under its regional funds to 15 per cent, from the usual 50 per cent.

The commission, which manages the funds, and other EU member states will also set up a program of technical assistance to make sure debt-laden Greece uses the money to stimulate economic growth and create new jobs.

The EU funds are designed to help underdeveloped regions catch up with richer parts of the 27-nation bloc. About ? 15 billion ($A20.42 billion) is still available for Greece until 2013, but the country has been struggling to prove it can use the funds well and come up with matching financing.

EU leaders hope that the prospect of some EU funds - which, in contrast to the rescue loans Greece has been receiving for the past year, do not have to be repaid - will offer some hope to Greek citizens who have been suffering through a steep economic recession and unemployment above 16 per cent.

The Greek debt crisis, which has already spilled over into Ireland and Portugal and threatens to take a larger toll on the 17-country eurozone, has reached a new boiling point in recent weeks. Barely one year after first being granted ?110 billion in rescue loans from other eurozone countries and the International Monetary Fund, it has become clear that Greece will need tens of billions more to avoid defaulting on its massive debts in the coming years.

But eurozone governments have blocked a final deal on a new aid package - as well as the payment of a crucial ?12 billion installment of the existing bailout - until the Greek parliament passes ?28 billion in additional spending cuts, tax increases, economic reforms and public asset sales. The new measures, which will allow Greece to meet the deficit targets set out in its bailout program, have sparked sometimes violent protests and been opposed by the conservative opposition party.

In their statement on Thursday night, the leaders said the comprehensive package of reforms "must be finalised as a matter of urgency in the coming days" for the new funds to be disbursed. Earlier in the day, they also piled pressure on Greek opposition leader Antonis Samaras, who was in Brussels for a meeting of European conservatives, to back the new measures.

"We call on the opposition to fulfill its historical responsibility," German Chancellor Angela Merkel said as she arrived at the summit. Samaras' conservative party had been in power for years before Socialist Prime Minister George Papandreou took over in late 2009 and discovered that Greece's deficits were much bigger than previously disclosed.

But in their final statement, the leaders also made a stronger commitment to a second aid package for Greece, saying the promised austerity measures "will provide the basis for setting up the main parameters of a new program jointly supported by its euro area partners and the IMF".

The leaders decided that the European Commission's bailout fund, the European Financial Stability Mechanism, won't be part of the new Greek bailout, EU President Herman Van Rompuy said. That's a win for British Prime Minister David Cameron, who had strictly opposed using the ?60 billion EFSM, which is backed by the EU budget.

On his way out of the summit, Greek Prime Minister George Papandreou said "very important decisions" had been made at Thursday's meeting. "We got the support of our partners. This is not only a green light but a positive sign for the future of Greece," he said. "I believe we are on a stable on a stable course. It is a difficult course for Greece."

http://www.theaustralian.com.au/business/news/greece-gets-access-to-development-funds/story-e6frg90f-1226081293831