Greek Budget Cuts Not Enough, Deal is Dead

The hoped-for deal on the Greek debt swap has been rejected by Eurozone finance ministers, who demanded that Greece cut another €325 million. But that’s not all. The Eurozone also wants the Greek government to push a wide-ranging financial reform package through parliament and to obtain a pledge from Greek politicians that the commitments they make now will be honored after April’s elections.

And as if that weren’t enough, the ministers are also threatening to take a more active role managing Greece’s finances, including improving the country’s tax collections and speeding up the sale of Greek assets.

The Eurozone ministers plan to meet next Wednesday, and are prepared to sign-off on the bond swap, provided Greece meets all these conditions. Since Greece has already rejected Eurozone interference in its day-to-day governing, there seems little chance that a new deal can be struck.

If Greece does not strike a deal and receive the €130 billion bail-out package, the country will default on its March debt payment. In order to meet the payment deadline, a deal must be struck by next Wednesday. If Greece fails to make its March payment, no knows for sure what will happen next.