Business

Greek deal signed

GREECE yesterday unveiled a political deal over budget cuts that should unlock a 130bn euro aid package and enable Athens to avoid a potentially catastrophic default next month.

After a week of fraught negotiations between the three parties that make up Lucas Papademos' coalition government, the Prime Minister's office yesterday confirmed that agreement on 3.3bn euro of new spending cuts had been secured.

Greece's financial backers in the European Union had said that they would not deliver the aid that Athens needs to redeem 14.4bn euro of its bonds next month unless the government committed itself to sweeping new austerity measures.

The cuts package, equal to around 1.5 per cent of Greece's GDP, will impose deep cuts in the minimum wage and will result in thousands of public sector job losses.

The announcement prompted a furious response from the Greek trade unions, who promised more protest strikes today and over the weekend. There was also a ministerial resignation in response to the cuts agreement.

The Deputy Labour Minister, Yannis Koutsoukos, a member of the socialist Pasok party, walked out of the government accusing Greece's foreign creditors of subjecting the country to "blackmail".

The financial markets reacted with relief to the news of the deal yesterday afternoon, sending stock markets and the value of the euro higher. But there are further political hurdles to be crossed before Athens secures its new funding.

Eurozone finance ministers need to approve the Greek budget package before they sign off on the 130bn euro bailout.

This was originally due to take place at a Euro Group meeting in Brussels last night, but ministers from Germany and the Netherlands said that they did not have sufficient detail to make their decision.

"We have come very far, but we are still not far enough," said the German Finance Minister, Wolfgang Schäuble.

The new aid agreement also needs to be given the nod by the German parliament, where some hardline Bundestag delegates have indicated that they will vote against a new bailout for Athens.

The German Chancellor, Angela Merkel, will meet the leaders of her parliamentary party today in an attempt to drum up support for the deal.

The Bundestag is expected to hold a vote on the subject next week.

Yesterday's agreement should clear the way for the agreement between Athens and its bondholders to be sealed.

This separate deal, which will see Greece's private sector bondholders take a 70 per cent reduction in the long-term value of their bonds, will give Athens around 100bn euro in debt relief, taking the country's debt to GDP ratio down to 120 per cent by the end of the decade.

There was also a strong hint from Mario Draghi yesterday that the European Central Bank (ECB) is preparing to play its part in reducing Greece's sovereign debt burden.

The ECB accumulated an estimated 55bn euro worth of Greek bonds at a deep discount in 2010 and 2011 when it was attempting to stabilise the eurozone's bond markets. If held to maturity, these bonds would deliver a profit for the ECB of around 15bn euro.

There have been suggestions in recent weeks that the ECB could transfer these securities to the European bailout fund, which could then transfer the profit to Greece, so Athens could reduce its debt burden.

At his monthly press conference in Frankfurt yesterday, Mr Draghi denied that this would represent a breach of the ECB's constitution, which proscribes direct lending to member states (or "monetary financing") by the central bank to governments.

"If the ECB gives money to governments, that's monetary financing. If the ECB distributes part of its profits to its member countries... that's not monetary financing," Mr Draghi told reporters.

Topics:  eurozone greece



Ain’t no mountain high enough

GOING on a hike is one of the best ways to get active and outdoors and the big smoke Brisbane is dishing up the goods.

Brisbane's arts and culture events centre stage

You loved the film, now you're about to love the musical. Don't miss The Bodyguard The Musical in Brisbane this July.

THE arts and culture events you don't want to miss.

A whisky-lover's blueprint to Brisbane's best bars

Check out The Gresham for some old-school fine drops.

SCOTCH, Whiskey and Whisky; it all gets a bit confusing.

8 things you didn't know you could do at North Straddie

Watch these guys while you enjoy the magical sunset of an evening.

NORTH Stradbroke Island is the perfect getaway.

Your guide to the best Brisbane markets

Enjoy the beautiful offerings of one of Brisbane's many markets.

WHO doesn’t love a good market!?

Six hideaway bars to escape winter chill

The Gresham's charm will win you over before your first sip.

THESE are the perfect places to hang this winter.

Our six art gallery picks for a creative day out

Queensland's Gallery of Modern Art always has a fun, exciting and interesting exhibition on show for the whole family to enjoy.

YOU'D be mistaken in thinking Brisbane wasn't an arty city.

REVEALED: Meet our five Ninja Warriors

TWEED HEADS: Upcoming TV Series Ninja Warrior contestant Jaymes Wright.

Australian TV series starts next month on Channel Nine

UPDATED: Police raid South Tweed warehouse after shooting

The man presented at Tweed Hospital with single shot to the torso.

TWEED-BYRON police claim yesterday's fatal shooting of a man was not related to...

Well-known Dr Jane gives her name to Aussie bilby

Swim legend Dawn Fraser (left), patron of Save the Bilby Fund, and Dr Jane Goodall, founder of the Jane Goodall Institute, meet up with an Ipswich bilby.

Three living legends rub shoulders at bilby naming

Local Partners

Blueberries help property market boom

Rural property market reflects expansion of blueberry industry into the Clarence and growth in the cattle market


Bundy mum blogging to get families offline

FAMILY FUN: Deonie Crowther is holding family craft sessions at the Windmill Cafe in Bargara.

Crafty projects a hit with parents and children

Shoes make difference to kids in Zambia

MANY SHOES: Toowoomba Grammar School's Adrian Irwin and Fairholme College's Libby Stumer with shoes collected for children in Zambia.

Students are making a difference, creating a new project

A chance to support marriage equality at Splendour 2017

TOURING: Sigur Rós is an Icelandic post-rock band from Reykjavík formed in 1994.

Thanks to Sigur Ros and Margaret Court

Schapelle Corby's Bali boyfriend 'lonely' now she's free

SCHAPELLE Corby’s boyfriend Ben Panangian has spoken of his loneliness for the first time since his lover of 11 years was deported from Bali.

‘One of the most ludicrous films ever made’

Optimus Prime in Transformers: The Last Knight.

Transformers: The Last Knight has been shredded by critics.

Transformers movie bombs to horror opening week

Optimus Prime in a scene from, "Transformers: The Last Knight."

Transformers 5 had the worst opening in the franchise’s history

How 9/11 helped make Waleed Aly a household name

Waleed Aly and Susan Carland at the 2016 Logie Awards

“It feels like there was a script written for me,” he said.

Pixar weighs in on viral Toy Story theory

Woody and Buzz Lightyear from Toy Story.

DID Andy’s dad tragically die just before the story took place?

VIRAL VIDEO: Campaign to bring beloved nanny to Maryborough

** ADVANCE FOR MONDAY, OCT. 16 **FILE**This promotional photo provided by Disney Home Entertainment shows actors Julie Andrews as Mary Poppins and Dick Van Dyke as Bert in a scene from the 40th anniversary edition of the Disney DVD. P. L. Travers, author of the "Mary Poppins" books, approved of Andrews as Poppins but considered Van Dyke "all wrong" and objected to mixing animated characters with live actors. (AP Photo/Disney Home Entertainment)

Can we get Dame Julie Andrews to come to our festival?

Ocean views up for sale at Bargara Rise

LAND RELEASE: Rob Sergiacomi on site at the Bargara Rise development off Watsons Road Bargara.

More ocean-view land comes on the market at Bargara

Gateway to $3 billion, 4800 home new Coast city opens

The start of Peter Crosby Way at Sippy Downs, the northern access into the Harmony master-planned community at Palmview.

Palmview's $3b master-planned community of Harmony

Millionaire Nathan Birch to offload $55M in property

Nathan Birch wants to focus more on developing properties.

Sydney property investor has announced he is selling up

Fame factor boosts property prices in Byron

The stunning Clarke's Beach in Byron Bay.

House prices surge by an incredible 39.5% in star-studded area

Buyers flock to Tweed hipster hotspots

Tweed houses and units continue to be hot property.

Casuarina keeps top spot for region's house prices

Ready to SELL your property?

Post Your Ad Here!