Greece Passes Austerity Bill
The Greek Parliament approved a package of austerity reforms on Sunday, clearing the first of three hurdles it must overcome to qualify for a second bailout worth 130 billion euros. Greece needs the bailout funds to avoid a potential default on a 14.5 billion-euro bond redemption on March 20.
The approved measures include job and salary cuts for government workers, pension reforms, and other measures to reduce government spending. Greek political leaders had hammered out an agreement last week, but euro-zone finance ministers were not satisfied and set out additional conditions.
Now, in addition to securing parliamentary approval of the reforms, the government must identify another 325 million euros in spending cuts. Political leaders must also give assurances that the program will be implemented even after elections are held later this year. If those conditions are met, euro-zone finance ministers are expected to endorse the program at a meeting on Wednesday.
Greece is also expected to complete a deal with private-sector creditors next week to write down 100 billion euros worth of Greek government bonds through a debt exchange that would leave investors with a loss of up to 70 percent on their bonds.
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