Eurozone Ministers Approve New Greek Bailout

Posted February 21st, 2012 at 8:25 pm (UTC-5)
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Greek Prime Minister Lucas Papademos says the country has a lot of work to do before getting the new $172 billion bailout from the European Union and International Monetary Fund.

The Greek parliament has agreed in principle to the package of spending and job cuts as demanded by the EU and IMF. The lawmakers must now pass all 79 specific measures included in the package before getting the bailout funds.

The bailout will likely avoid the bankruptcy Greece faces if it cannot pay investors $19 billion when government bonds come due on March 20th.

But the rescue package requires Greece to make deep and unpopular spending cuts. They include 22 percent cut in the country's minimum wage and the elimination of 15,000 government jobs.

Thousands of Greeks have held sometimes violent street protests against the cuts, saying they have already sacrificed enough.

But eurozone finance ministers chief Jean-Claude Juncker says the bailout will preserve the financial stability of both Greece and the eurozone.

White House said President Barack Obama called German Chancellor Angela Merkel to welcome the “positive steps” European leaders took to help defuse the Greek debt crisis.

Greece got a $145 billion bailout last year and is by far the biggest recipient of international aid in the history of the 17-nation eurozone. Yet Greece accounts for just two percent of the eurozone economy.