After long talks EU has finally come up with a plan to save Greece and therefore Euro and prevent the financial crisis. But will it work? The solution is, that the "banks holding Greek debt accept a 50% loss, the eurozone bailout fund will be boosted and banks will have to raise more capital".
Even though Euro's bailout fund has been increased to 1 trillion €, some people still argue that it might not be enough, especially not to bail out bigger economies, such as Spain or Italy. Interestingly, the article doesn't mention the fact that Slovaia, as the only country, has asked for an exception, and while Slovakia will still participate at the Euro bailout fund, they did not agree to loan any more money to Greece. It is also not definitley clear that Greece is now safe, as it will still have to battle it's huge debt, and make strong cuts in it's government spending.
But the new resolution has already had a positive response from the markets, as Euro has finally experienced growth, as the investors can see the higher stability, since with this resolution Europe showed the willingness to cooperate. Eurozone how ever has to wait for the Greek decision, which is to be made democratically, by a referendum. Although this solution might seem like a good deal for Greece, many Greek people still believe that bancrupcy would be a better solution than never ending debt.
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| Greek prime minister announcing referendum |
