Bailout Greece 's Request For A 30 Billion Eurodollar Program
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In 2010, the IMF unanimously agreed to jointly bailout Greece in conjunction with the Euro partners.The board approved Greece’s request for a 30 billion Eurodollar program, and a bilateral financial support of 80 billion Eurodollars that will be available from Euro partners. Talley (2014) notes that many IMF officials said that probably too much of the adjustment burden was placed on the Greek nation while nothing was asked from its European creditors. The end result was there was quite a bit of suffering by the Greek government and the nation as a whole. Could this bailout have been handled better and the results been different if the IMF had followed the rules that were set in place in 2002?
Tally (2014) states that the main objectives of the program, as set forth in an IMF internal memo(dated May 9 2010) were to reduce the Greek fiscal debt to below 3 percent by 2014 with the debt-to GDP ratio beginning to stabilize in 2013 and then start gradually declining. This also included thesafeguarding of the financial system and the restoration of the competitiveness of the Greek economy through structural reforms. The program also envisions a front loaded fiscal adjustment of 11 percent of GDP in 2010-13. These adjustments consisted of an increase in tax revenues by 4 percent of GDP, and Included a reduction of expenditures of 5.2 percent of GDP by primarily abolishing 13th and 14th salaries of civil servants and the 13th and 14th pensions in both the public and private