A meeting between Greece and its international lenders on November 17 has successfully unlocked €12bn in bailout funds. The much needed capital will contribute €2bn towards the country’s mounting debt and €10bn for the recapitalisation of the country’s banks, which will, crucially, allow them to rebuild cash reserves.
The development in negotiations was reached through a new formula whereby the state can continue offering protection to homeowners from foreclosure. Under the new rules, around a quarter of Greek homeowners that are deemed the most vulnerable will be shielded from foreclosures. A further 35 percent is also eligible for protection based on their mortgage payment history and property value.
The conditions for the €86bn bailout that Greece received in July required the state to increase taxes and increase spending cuts further
The Greek parliament will vote the terms of the deal on November 19; many expect the notion to be passed as the coalition government holds the seat majority in the legislature.
The conditions for the €86bn bailout that Greece received in July required the state to increase taxes and increase spending cuts further. Yet, the Syriza-led government has failed to implement the strict measures following September’s national elections and various disagreements. Unsettled issues include bad bank loan procedures and potentially scrapping a proposed levy on private education.
Although a series of economic measures were passed by parliament last month, EU finance ministers argued that they did not fully meet the requirements needed to secure a further €2bn loan from international creditors. Creditor demands for the leftist government to enforce mortgage foreclosures has been a stumbling block in negotiations as the governing coalition argued the necessity of protecting families from losing their homes in order to ensure social stability.
The new deal signifies a promising milestone in Greek talks with lenders and one that will also help to secure social cohesion among a disgruntled population.
