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article imageOp-Ed: Eurogroup and IMF reach agreement on Greek debt

By Katerina Nikolas     Nov 27, 2012 in World
Ministers from the eurozone in conjunction with the IMF have reached an agreement on Greek debt. The arrangement means Greece will receive €34.4 billion by the end of this year, staving off bankruptcy and a Grexit.
Greece needed to remain in the eurozone, at least until next October's German elections ensure Frau Merkel remains in power. The risk of contagion is just too great a risk, with the parlous state of Spanish debt threatening the whole concept of a united currency if Greece is allowed to leave the eurozone.
Although the trials and tribulations of the euro have left Mediterranean countries floundering in austerity, the great hopes of eventual political union leave the great advocates of sticking with the flawed currency continuing to push unsustainable temporary solutions on debt ridden countries. Unable to agree on current policy towards Greek debt, powerful yet financially inept politicians and high-ups in the IMF can miraculously predict the state of the Greek economy in 2020.
Ekathimerini reports € 23.8 billion of the total € 34.4 billion worth of loans Greece is to be granted by the end of this year, will go towards the recapitalization of Greek banks. While Germany contemplates how much a Greek default would cost German taxpayer's and bungle the chances of Merkel continuing her reign, KTG reported "Athens has paid € 380 million for German loans interest rates."
This reinforces the fact that the loans are just that, rather than hand-outs. As Greek banks receive a bail-out and the Greek elite squirrel their wealth away in tax havens and the London property market, ordinary citizens contemplate a winter of discontent.
The deal that has finally been reached lowers the interest rates on Greek debt and reduces the debt by € 40 billion. Olli Rehn, head of the European Union Economic and Monetary Affairs, declared his satisfaction with the deal, saying: "This is not about money. This is the promise of a better future for the Greek people and for the euro area as a whole, a break from the era of missed targets and loose implementation towards a new paradigm of steadfast reform momentum, declining debt ratios and a return to growth. This was a test for the eurozone and we simply could not afford to fail."
Certainly the gravy train for the EU elite may halt if the grand eurozone project failed, but quite when the issue of receiving a loan became not about money is hard to credit.
Prime Minister Antonis Samaras told the press: “Everything went well. All Greeks fought together. A new day begins tomorrow for all Greeks.” That of course excludes the many hundreds that have taken their own lives, and those unable to catch Samaras's televised speech as their electricity has been cut off.
Opposition SYRIZA MP Dimitris Papadimoulis described the agreement as "a half-baked compromise, a band-aid on the gaping wound of debt" Ekathimerini reported. Gerard Lyons, chief economist of Standard Chartered Bank, told the BBC that while the deal mitigated the risk of Greece leaving the euro "What Greece really needs is to reverse [its] austerity measures."
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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