As Greek politicians now lobby for revisions to their own terms, EU officials stress the deal does have strings attached. Yet despite the political wrangling, analysts see the loan programmes for the euro’s four bailed-out members as broadly similar reports The Telegraph.
Interest rates vary with the market, but if one country gets a cut, the others will demand one too. Last year the rates were dropped to 3.5 per cent for most of the bail-out funds.
Athens has now brokered two bail-outs of €110bn and €130bn respectively, although they have been partly merged, notes think-tank Open Europe. The unique point about Greece is that private sector holders of its debt were forced to write off more than 50 per cent of the nominal value of the debts they hold, some €105bn.
In return, Athens is cutting hard. Taxes have risen sharply, while government pensions and wages have been slashed by up to 40 per cent. The total level of budget cuts Greece is expected to undergo is a massive 20pc of its GDP by 2013.
When the €85bn Irish rescue came in November 2010, a more formal structure was in place than when Greece was first bailed out, but the price was the same: austerity.
The income tax base was widened, the minimum wage cut €1 to €7.65 an hour and VAT raised – though Dublin’s much-vaunted corporation tax rate remained at 12.5 per cent.
Lisbon’s €78bn package has seen it follow the same path as its peers, with measures including wage cuts of up to 20 per cent for civil servants and the sale of its stake in the national electric company to a state-run Chinese business.
Like Ireland, Spain needs funds not because of fiscal extravagance but because its banks have run out of money.
But, in contrast, international oversight will focus on Spain’s financial sector rather than the state, saving face.
Still, analysts see it is a hollow victory, as even before its €100bn bail-out request Spain had embarked on an extreme austerity programme, including VAT and retirement age increases, and sweeping government spending cuts.