Another Greek party leader Antonis Samaras of the New Democracyparty has agreed to the new austerity measures. The release of the funds by March 20 was conditioned on Greek party leaders accepting the terms of the bailout.
Now some members of the Eurozone including Germany, Finland and the Netherlands want to push the date for releasing the funds to April. Some Greeks see this as an interefernce into its democracy as elections are held in April and the Eurozone want parties that agreed to the bailout to prevail.
Greece capitulated to the tough line stance of the EU,IMF and ECB by agreeing to more austerity. The measures were agreed to so that Greece can obtain the next trancheof the second bailout.
The plan to postpone the payment of the 14.5Billion euros will make it less likely that the private bondholders would want to agree to a haircut on its bonds if they are not assured of EU participation.
Many analysts believe that Greece will ultimately default,because even after 8 years of austerity Greece debt to GDP ratio would be 120% worse off than Italy is today.
If Greece does not receive the payments in March, the country will end up defaulting on its debts.The final agreement has not yet been completed but Greeks can expect more wage cuts and tax hikes.
Many Greek citizens work only sporadically and according to one spokesman some Greeks live on less than one euro a week.Ilias Iliopoulos, at the civil servants' union ADEDY, said: "We don't care if they feel forced to accept such measures. The fact is 500,000 families are not even earning a euro a week and another million only have work sporadically."
Greece has been in talks with private sector bondholders, for weeks including banks and pension funds to take haircuts on the bonds.The private creditors are represented by the IIF the Institute for International Finance, headed by Charles Dallara
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