The Eurogroup praised Greece for legislating all 140 prior actions required to pass its second review under the programme – specifically in terms of tax reform, pension reform and labour market reform, all of which aim to make its economy more competitive.
In terms of debt relief, the Eurozone made two concrete concessions. First, it promises to link Greece's rate of debt repayment to its rate of growth. The better the economy does in a given year, the more Greece will pay back. The corollary is that if Greece has little or no growth, it ought to receive a reprieve from creditors. This was a key demand of former finance minister Yanis Varoufakis in 2015, who claimed that a depressed economy could not reasonably be squeezed for debt repayment. [...]
Second, the Eurogroup agreed to defer and extend repayment of Greece's second bailout loan by up to 15 years. This loan, which ran from 2012 to 2015, was Greece's largest and $145bn (€130bn) of it is still outstanding. That amounts to almost half of the entire debt.
These two measures will be put into effect between now and the end of the programme, but the Eurogroup will specify further debt relief measures to take effect after the summer of 2018. It has to specify these by July 27, in order for the IMF to become a participant in the third bailout. [...]
The Greek economy was forecast to grow by 2.7 percent this year, but the Hellenic Statistical Authority reports that it Grew by just 0.4 percent in the first quarter. The Federation of Greek Industry today reports 53.6 unemployed people for every job vacancy.
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