Greece reaches agreement on bailout plan
The deal with eurozone creditors was settled after 18 hours of talks.
Greece and its creditors have agreed on terms of a new bailout that could unlock up to €86 billion ($145 billion) in financing over the next three years.
Officials from the European Commission and the Greek government said the agreement was reached after 18 hours of talks.
The deal still needs to be approved by eurozone finance ministers and the national parliaments in some eurozone countries.
A first payment from the new bailout could be around €25 billion, with half of it going toward repaying Greece’s official creditors.
Some €10 billion will be set aside for recapitalising Greek banks hurt by deposit outflows and bad loans amid the recession. Another €3 billion will be paid to clear the debts of government contractors.
Recovery plan details
The agreement comes with a lengthy recovery plan. This includes:
- scrapping tax breaks for farmers who now receive subsidised fuel;
- tighter regulations on a repayment system in instalments for individuals owing back taxes to the state;
- a gradual increase in a "prepaid" income tax mechanism that asks taxpayers ranging from the self-employed to small businesses to pay upfront on forecast income; and
- an increase in a “solidarity tax” paid by earners in the €50-100,000 annual bracket to 6% from 4%.
Future measures are:
- ambitious pension reform; product market reform including Sunday trading, pharmacy ownership, milk and bakeries;
- privatising the electricity transmission network; reviewing collective bargaining, industrial action and collective dismissals; strengthening the financial sector, including action on non-performing loans and eliminating political interference.
Greeks will also have to take the following actions:
- privatisations involving transfer of assets to an independent sovereign wealth fund designed to raise €50 billion euros
- cut costs of public administration and reduce political influence over it.
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Nevil Gibson
Wed, 12 Aug 2015
Wed, 12 Aug 2015
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Greece reaches agreement on bailout plan
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