January 3, 2012
The holiday break was welcome, but on Tuesday, a Greek government spokesman said that the next three months were crucial if his country was to remain part of the euro zone. The bailout agreement with the EU, he said, must be finalized. Or else.
The New Year's address delivered by Greek Prime Minister Lucas Papademos was not exactly full of hope. A "very difficult year" was coming to an end, he intoned, and another "very difficult year" was beginning. He also said that the first three months of the new year were "especially critical."
On Tuesday, government spokesman Pantelis Kapsis told Greek television station Skai TV exactly what that means. Greece and the euro zone have to quickly reach agreement on the second, €130 billion bailout package agreed to in principle last autumn. Otherwise, the country faces insolvency.
"The bailout agreement needs to be signed," he said. "Otherwise, we will be out of the markets, out of the euro. The situation will be much worse."
Athens and Brussels are currently in the process of hammering out the details of the bailout package, which includes a 50 percent haircut on Greek bonds aimed at cutting overall debt by €100 billion. Negotiations with private creditors over the writedowns are a crucial element of the aid package. In addition, representatives from the European Union, the European Central Bank and the International Monetary Fund -- the so-called troika -- will be in the Greek capital on Jan. 16 to monitor progress made on promised reforms and austerity measures.
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