A new bailout agreement between Greece, the IMF, and the EU (read: Germany), has been announced.
According to WSJ, it would entail Greece receiving over $100 billion, in exchange for a series of strict austerity measures that would see the country getting its deficit-to-GDP under 3% by the year 2014. This would be accomplished by a series of spending cuts and tax hikes.
We’re having trouble seeing how this is significantly different than other bailout announcements (there have been several).
Greece still needs to convince the public that this can work, which already seems dicey since labour leaders are already furious.
And Merkel is out talking to the likes of uber-populist newspaper BILD — which frequently runs anti-Greece cover stories — trying to conviince Germans that the money going to Greece comes with harsh conditions, and that it represents a big warning to the likes of Portugal and Spain.
On Friday there was hope that a solution would be cobbled together, and there has been one, but we’ll know in a few hours whether this is the type of deal that looks so much more solid than past failed efforts such that it will actually convince the market it’s the real deal