Greek Lawmakers Pass Spending Cuts Required for Loans
06 May 2010
An investor at New York Stock Exchange watches as markets react to news from Euro countries Thursday
This is the VOA Special English Economics Report.
Greece's debt crisis has shaken investors in the United States and worldwide. They worry that it could spread far beyond Greece.
On Thursday, a day after huge protests in Athens, the Greek parliament approved a series of spending cuts.
Greece has to cut thirty billion dollars as part of a bailout deal with the European Union and the International Monetary Fund. The deal is for one hundred forty-five billion dollars in loans.
The cuts include wage freezes and reductions in retirement pay for government workers. A new requirement raises the retirement age for women from sixty to sixty-five.
Critics say the austerity plan will hurt the poor especially. But Greek labor costs are high even for Europe. And Greece's public debt is equal to at least one hundred fifteen percent of its economy. The cuts may be the only hope to avoid declaring bankruptcy.
Sebastien Galy is senior currency strategist for the French bank BNP Paribas. He says other European countries delayed rescuing Greece because it was politically unpopular. Now they are paying for it.
SEBASTIEN GALY: "They certainly lost an opportunity that we had in January where it would have cost roughly sixty billion euros to save Greece."
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