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Greece set for new bailout loans in return for 'severe conditions' - report

Greece will be subject to unprecedented international intervention in its domestic affairs in return for new bailout loans according to a report in today’s Financial Times.

Protesters took to the streets on Sunday to protest against austerity and potential privatisations.
Protesters took to the streets on Sunday to protest against austerity and potential privatisations.
Image: KOSTAS TSIRONIS/AP/Press Association Images

GREECE WILL RECEIVE extra funding from the Eurozone and the International Monetary Fund in return for unprecedented international involvement in the country’s economy.

The Financial Times is reporting that European leaders are negotiating a deal that would see international involvement in tax collection and the privatisation of state assets.

In return, Greece would receive new bailout loans amounting to between €30-35 billion which would be on top of the €110 billion already promised under the bailout programme agreed last year.

Officials hope that as much of half of the €60-70 billion that Greece needs until the end of 2013 could be financed through the sale of state assets and the change in repayment terms for private debtholders.

Although the paper adds that almost every element of the new package faces opposition from at least one of the governments and institutions involved, and a deal could still unravel.

Only yesterday, the EU Commission’s top finance official Olli Rehn said that the EU may not pay Greece the next installment of its bailout should the country fail to honour guarantees it has given to pay back its debt.

He was echoing comments from the Eurogroup president Jean-Claude Juncker on Thursday who suggested that the International Monetary Fund would delay its payout of the next tranche of loans.

Such comments have meant that pressure is building to get a deal done before the next loan payment is due in June.

About the author:

Hugh O'Connell

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