A deal has been reached for the Greece debt crisis. The Greeks and the Eurozone Summit has worked out a 3-year program of fiscal reforms and austerity in exchange for further bailout cash of about 86 Billion Euros, around $96 Billion US dollars. This is the third bailout deal for Greece in 5 years after their economy crashed. Banks may reopen as early as Wednesday since being closed two weeks ago. Greek Prime Minister Alexis Tsipras conceded to many of the European Central Bank demands to clean up the nation′s budget problems. The terms are pretty much identical to those proposed earlier and rejected by Tsipras and the Greek people during last weekend′s referendum vote. This includes reforming labor unions, decreasing pensions, increases to the VAT and income taxes, as well as a move towards privatization.
So the Greek drama may appear to be over but there is still a mighty long road to travel. Some of the ′chatter′ today is that Greece is considering filing a lawsuit against the mega-investment bank, Goldman Sachs. This potential course of action is based on allegations that Goldman Sachs misled officials in Greece and the European Union in 2001 during talks to admit Greece to the Eurozone. That in order to meet EU conditions of the Maastricht rules, the mega-bank allegedly orchestrated financial swaps to hide Greek economic problems. Naturally, the bank did so for a profit, and may have set the stage for the chaos which followed. In short, the swaps are said to have made the debt burden of Greece appear smaller than it actually was.
This round of the Greece debt crisis in 2015 may seem resolved as the government in Athens concedes to the Eurozone′s demands. A bailout by the European Central Bank of $86 Billion Euros over the next 3 years may keep the Greeks in the European Union for now. However, Prime Minister Alexis Tsipras will still have to sell another round of reforms, budget cuts and tax increases to the nation′s citizens. The very same agenda the citizens rejected in last weekend′s referendum vote. Good luck with that!