By Alex Marinides
Greece has come back from the brink of financial disaster. On February 24th, the new Syriza government secured a four-month extension of it’s financial bailout at the hands of other, wealthier nations in the Euro Zone.
The agreement came with a price–Athens had to put forward a list of reforms it would carry out in exchange for the extension, which had to be approved by the European Commission, the European Central Bank, and the International Monetary Fund.
These reforms include methods to fight tax evasion (a huge problem in Greece) and corruption (also a huge problem).
If the bailout had not been extended, it would have further hurt Greece’s already terrible economy. If it had not happened, Greece could have gone bankrupt again, which may have led to it leaving the Euro, something that would likely spell disaster for both the country and the Euro Zone.
The financial aid package now has to be approved by the other Euro Zone parliaments, including Germany, which has proved resistant to lessening financial terms towards Greece.
Greece’s debt is one of the highest in the region, at 175% of GDP.
Syriza (the new government) has shown a willingness to compromise that surprised many following their victory a month ago. The party ran on an economic populist platform that rejected the heavy debt burden imposed on Greece by other countries, mainly Germany.
Alexis Tsipras, the new Prime Minister of Greece, says that this was a crucial compromise, stating that Greece will no longer be “asphyxiated”.
Greece has been in dire straits for years, and is currently at 25% unemployment.
It remains to be seen how the debt renegotiations will go after this four month period ends.
