While European creditors decide whether to grant Greece its next bailout, sources Tuesday say a recent reform package enacted by the country is not enough to qualify.
Greece faced severe economic problems for years. Some international coalitions are trying to help the country and the current plan is a series of bailouts in exchange for financial reforms. A source for Bloomberg Business, however, says the last set of reforms passed Oct. 16 does not include everything needed for Greece to qualify for the next roughly €2 billion payment under the €86 billion ($97.5 billion) bailout program.
Creditors plan to meet between Wednesday and Friday to decide whether to grant Greece the next bailout. A decision on if the country will get the next bailout payment could come next week. The European Commission, European Central Bank, European Stability Mechanism and International Monetary Fund are leading much of the effort. Failure to help Greece won’t just cause the country to fall into further financial trouble, it could have global implications.
Global stocks fell June 29 following a weekend of troublesome bailout negotiations. It occurred after Greek officials announced plans to close banks and impose restrictions on cash withdrawals. China, Germany, France and Britain as well as Wall Street all opened June 29 with slow or declining stocks.
The bailout package was agreed upon July 13 by Greek Prime Minister Alexis Tsipras and the European coalitions. In the face of international pressure, Tsipras is pursuing welfare and pension cuts among other critical reforms. Growing unemployment, early retirement, horribly run welfare programs, declining labor standards, complacent and corrupt officials and powerful unions have all been blamed for the financial problems.
It wasn’t until 2009 when things got really bad. In that year, Greece went from a fiscal crisis to a sovereign debt crisis. This eventually caused the country to go into a recession.
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