EU reaches deal with Greece


The European institutions and the Greek government appear to have agreed the main elements of a deal allowing the next slice of a loan agreed in 2015 to be paid to Greece this summer.


The deal was announced after a meeting of finance ministers from the Eurozone countries in Malta on 7 April. Dutch finance minister Jeroen Dijsselbloem told the press that “we have an agreement on [the] overarching elements of policy”. 


The settlement involves a cut in net public spending, equivalent to 1% of GDP in 2019 and a further 1% in 2020. The 2019 cut will be largely achieved through pension reductions, and in 2020 through cuts in tax allowances, resulting in higher taxes. 


In addition, provided the Greek economy is doing well, the country’s government will be able to increase spending in other areas. These include tackling child poverty and youth unemployment as well as reducing the cost of medicines for pensioners.


On the issue of changes to employment law, the plans to make large-scale redundancies easier and to allow employers to lock out workers during industrial action have been abandoned. 


Starting in September 2018, the Greek government will also begin to reinstate some of the collective bargaining rights, which were removed in response to the crisis.