European finance ministers have granted Greece’s request for two more years to meet the strict austerity measures imposed in the bailout package offered in March of 2012.
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The extra time will also require additional funding to keep Greece afloat until the country’s leaders can bring its budget in line with the mandated levels.
The country’s creditors decided it would be better to give Greece more time instead of increasing Greece’s risk of default. The adoption of Greece’s austerity budget for 2013 incited street demonstrations.
Other officials argued whether governments in the Eurozone should write off some of the debt Greece owes them so that Greece can bring its debt levels into conformity.
Germany called this option illegal. But Greece is facing a deadline on Friday, November 16, for a €5 billion bond repayment.
An agreement, at least in principle, by November 20 would enable Greece to receive the next distribution of its bailout funds by the end of the month.
The difference of opinion between the International Monetary Fund (IMF) and European finance ministers is significant. The IMF’s director Christine Lagarde voiced public opposition
to granting Greece the two-year extension.
But the greater interest of both groups seems to be to keep Greece in the euro.