Greece secures second bailout


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25-06-2011 08:13 AM


ABC Canberra 666

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ABC Canberra 666


25-06-2011 08:13 AM



25-06-2011 08:54 AM

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2011-06-25 08:13:53

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JACKSON, Elizabeth




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Greece secures second bailout -

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ELIZABETH JACKSON: Greece has secured a second bailout from the European Union and the
International Monetary Fund and it's worth $150 billion dollars. In return for the bailout Greece
must introduce higher taxes, lower public service salaries and privatise a range of government

I spoke to our Europe correspondent Emma Alberici a short time ago and asked her about Britain's
decision not to contribute to the bailout, despite the Governor of the Bank of England saying that
the Greek crisis is the single biggest threat to the UK economy.

EMMA ALBERICI: Forty per cent of British exports go the EU, and the 17 member bloc represents a
fairly significant part of two-way trade for the UK generally. But specifically, what Mervyn King,
the governor of the Bank of England was referring to when he said that overnight was the fact that
banks in the UK are often talking about the fact that they're not directly exposed to Greece but of
course banks in the UK being among the biggest in the world have massive exposures to other big
banks which do have exposures to Greece. So they are indirectly affected, very significantly, by
the investments they make.

ELIZABETH JACKSON: Has there been any reaction in Greece yet?

EMMA ALBERICI: George Papandreou, the prime minster, was in Brussels for this two-day summit. And
he made a plea to his home market saying that austerity measures weren't necessary if this money
coming from the EU and the IMF was going to be forthcoming.

They had to take a bitter pill to receive this money in return and the Greek people of course have
been loathed to accept any of the austerity measures that are being proposed not only by their
prime minister but by stealth from the EU and the IMF. They want Greece to start paying its own way
and not continually rely on international investors to come to their aid.

ELIZABETH JACKSON: In fact, where does it end Emma, because at the moment Greece does appear to be
like a bottomless pit.

EMMA ALBERICI: Well it's hard to know. Next week there's a very pivotal vote in the Greek
parliament where both sides will have to agree on some very tough austerity measures, a package
that includes tax rises, spending cuts and privatisation of government assets.

If both sides of the parliament don't agree on that, the EU and the IMF are being very firm that
the bailout money will not be forthcoming. So next week is a massive turning point in this saga and
it's not out of the realms of possibility that Greece will default. They will have to declare
bankruptcy because if the EU and the IMF won't take it anymore.

ELIZABETH JACKSON: That's our Europe correspondent Emma Alberici speaking just a short time ago
from London.