Greek Politicians Agree To Austerity Package

It looks like a deal has been struck between Greece and the troika. The austerity package will include pension cuts and reduction in the minimum wage to 586 euro's/month. That will reduce all wages in Greece that are geared to the minimum wage. While all of the details are not clear, it appears that creditors will take a 70% haircut on the debt that they hold when the bond swaps are done. The Greek economy has been in recession for 5 years. The austerity measures are bound to depress the economy further in the short run. In the long run, it assumed that the structural reforms will make the economy more competitive. Public reaction, however, may make the reforms difficult to implement.