Parliament Handed Greek Bailout Loan for Consideration
The Cabinet has approved the memorandum of mutual intent between the European Commission and Greece on the second EU/IMF bailout loan and sent it to Parliament for approval.
Estonia would play a planned role in the new loan though the European Financial Stability Facility.
The aid package has a price tag of 130 billion euros, but the actual amount is yet to be determined and the IMF's precise role has not been decided. As a result, Estonia's share of the guarantees of the payments is not certain. Estonia currently pledges to guarantee 0.2748 percent of the EFSF's obligations.
The main condition contained in the memorandum now before Parliament is that Greece must reduce government debt to 120.5 percent by 2020. It currently stands at around 162 percent.
Greece must cut its budget to reach a surplus level next year. The plan is to carry out structural reforms such as cutting bonuses for civil servants. A privatization plan will be implemented to raise at least 4.5 billion euros this year, 7.5 billion by 2013 and 15 billion by 2015.
Government sector jobs will be cut back by 150,000 people by the end of 2015 compared to the end of 2010. Tax reforms and auxiliary reforms with a stimulus effect are also planned.
Kristopher Rikken