Greece avoided another potential brush with bankruptcy on Thursday after striking a deal with European creditors to tide it over for the rest of the year and gained assurances that its repayment burden would be eased when it can finally stand on its own after nearly a decade on financial life support.
After months of haggling that raised fears of another escalation in Greece’s nearly eight-year debt crisis, the 19-nation eurozone cleared the release of another 8.5 billion euros (US$9.5 billion) after the Greek government delivered on an array of reforms.
Getting the money was becoming urgent as Greece has a big repayment hump next month.
Photo: EPA
Perhaps more importantly for the longer-term, the Eurogroup made clear that it is ready to ease the burden of Greece’s debt repayments at the conclusion of the current bailout program next year.
The IMF might also get involved financially on a limited basis of up to US$2 billion.
“Overall, I think this is a major step forward,” Eurogroup President Jeroen Dijsselbloem said. “We are now going into the last year of the financial support program for Greece; we will prepare an exit strategy going forward to enable Greece to stand on its own feet again over the course of next year.”
He singled out the Greek people for their “intense efforts and resolve” over the past few years of the nation’s bailout era when successive governments had to enact drastic spending cuts and tax increases in return for the money needed to avoid bankruptcy and a possible exit from the euro currency.
The left-led Greek government, which has lost a lot of support since signing up for the nation’s third bailout even after campaigning against austerity, hopes the deal would help it get to a position to tap the international bond markets that lost faith in 2010 and forced Greece to rely on rescue money.
“We feel that after this Eurogroup [agreement], there is a much greater clarity for both the Greek people and for financial markets,” Greek Minister of Finance Euclid Tsakalotos said.
There is now “light at the end of the tunnel,” he said.
The office of Greek Prime Minister Alexis Tsipras said in a statement that the decision sends markets a positive message.
“The main point of today’s decision is that — for the first time — there is a clear Eurogroup commitment to support Greece’s market access and the successful completion of the program, with the creation of a significant liquidity reserve to back the country’s market access,” it said.
Among the measures offered to Greece was a possible 15-year extension in debt and interest payments due to European creditors.
In addition, following a recommendation from the new government of French President Emmanuel Macron, the possibility was raised of linking Greek repayments to growth, which could mean debt repayments would be postponed in the event of an adverse shock.
In return for these assurance, Greece’s government would have to continue with strict budgetary discipline beyond the end of its bailout program, including running a budget surplus after debt and interest payments of 3.5 percent of GDP through 2022 and then about 2 percent until 2060.
Despite years of austerity since Greece was first bailed out in 2010, the nation’s debt burden still stands at about 320 billion euros, or around 180 percent of Greece’s annual GDP.
For Greece, the agreement should limit the amount it has to pay in debt servicing each year, freeing up money it could use to help the Greek economy and society.
However, for austerity-weary Greeks, the latest deal is unlikely to mean much change any time soon.
More than 2,000 older Greeks on Thursday marched through Athens to demonstrate against cuts to monthly pensions.
“We can’t live on 300 euros!” they chanted, some waving sticks.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six