Greek Prime Minister George Papandreou on Sunday said his government had reached a long-awaited deal with the European Union and the International Monetary Fund for a massive rescue package aimed at combating a debt crisis that is threatening to engulf other nations in Europe. Officials were racing to cement the deal, and European finance ministers were set to meet in Brussels on Sunday to approve the bailout. With investors now too skittish to lend to Greece, Papandreou needs the rescue to fill bare coffers and prevent a sovereign debt default that could roil bond, currency and stock markets in Europe and beyond.
The rescue, expected to reach as high as $160 billion over three years, amounts to the first time the nations that use the euro will have come to the aid of one of their own since the creation of Europe's principal currency 11 years ago. To seal a deal, Papandreou had to promise massive new cuts to rein in runaway spending, which were unleashing a violent public backlash this weekend as tens of thousands of
The cuts are set to include fresh reductions in salaries for state workers, more flexibility to fire them, as well as increases in taxes and potentially even a hike in the retirement age for Greek workers.
Pay attention, kiddies, dopes, and other accolytes of the One. This is your future.
Nothing of those things are actually going to happen. The Greeks will pee the money away and then come back for more ...
Papandreou bluntly warned Greeks to prepare for the fiscal pain, particularly as the government will now seek to restructure a broke tax system plagued by rampant evasion.
Gee, I wonder if their cabinet ministers pay taxes?
The package was being rolled out in an attempt to prevent spiraling fears of a broader debt crisis in Europe, with the bonds of Portugal and Spain and even Italy and Ireland coming under pressure from investors last week. It remained uncertain, though, whether the Greek deal will ultimately prove enough to restore confidence in the finances of developed nations, which are now at the worst levels since World War II amid hikes in spending and drops in tax collection in the wake of the global economic crisis.