After tense negotiations and years of economic trouble, European creditors and Greek Prime Minister Alexis Tsipras Monday finally reached a deal to prevent the country from financial collapse.
The deal is critical to making sure Greece doesn’t fall into worse economic trouble. The country has been facing financial ruin for years and the only hope is to get another bailout from the European Central Bank and the International Monetary Fund. Like previous packages, the one negotiated Monday includes policy reforms Greece must implement in exchange for the bailout.
Though Greece has been facing financial trouble for a while, it wasn’t until 2009 that things got really bad. The Friedrich Ebert Foundation reports that in that year, Greece went from a fiscal crisis to a sovereign debt crisis– before finally going into a recession.
This is what you should know about the latest deal.
Now It’s Up To Greek Lawmakers
European leaders will need more than just Tsipras agreeing to the terms if the deal is to actually be implemented. As the BBC reports, the deal will require legislative approval, which may prove to be difficult since many provisions in the deal have been adamantly opposed by country officials. Greek lawmakers are expected to vote Wednesday on whether to accept the deal.
It will be up to Tsipras to convince his fellow countrymen that the deal is the right path.
It Includes A Huge Bailout
Like previous deals, the current agreement will include a significant bailout for Greece. The New York Times reports that the deal will include a bailout worth 86 billion euros. That would equal about $96 billion. The bailout would mark the third of its kind in five years.
Greece Will Have An Easier Time Paying Off Existing Debt
With previous bailouts, Greece owes a lot of money to the rest of Europe. According to The New York Times, the country owes more than 300 billion euros. The current deal would allow for easier payment methods to help get Greece back on its feet.
It’s Not Free Money
Like previous deals, Greece would have to also agree to some serious reforms if the country wants the cash. This is the area Tsipras may have difficulty selling the plan to Greek lawmakers. If it excepts the deal, Greece would have to cut pensions, increase taxes and agree to international oversight. Bailouts have proven to be one of the more costly and wasteful programs in the country.
A Long Meeting Ended With A Tweet
Tsipras and European leaders worked through the night starting Sunday in the hopes of reaching a deal. As Business Insider reports, the meeting lasted 19 hours. After it was over, the first confirmation that a deal had been reached was a simple Tweet from Belgian Prime Minister Charles Michel that stated, “agreement.”
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