In the next week, the Greek government plans to present its debt relief proposal to bondholders, and if European leaders have their way, it will be the last proposal for a long time.
If the majority of the country’s creditors accept the proposal, it could lead to one of the largest debt restructurings in history, with €100 billion of debt (about $132 billion) disappearing from Athens’s pile of IOUs.
Hopefully, Greece will be seen as a special case, rather than as an indicator that further debt renegotiations and uncertainty loom ahead.
If debt-holders discard the deal, however, officials are worried for the future. A refusal of the proposal would not only jeopardize the €130 billion bailout Athens hopes to receive from the European Union and result in a major loss for investors, but would also perpetuate the fear and doubt that has beset the eurozone for years.
Read more about the future of Greece and how eurozone finance ministers have turned up the pressure.
Hope has been boosted by the promises made by Antonis Samaras, the leader of the conservative New Democracy Party and the Greek politician widely expected to win April’s election, to honour the cuts and plans proposed to Greece.
Due to the pressures imposed by finance ministers, Samaras, who had previously blocked a pledge to stick to an austerity package, has committed himself and his party to implementing the new cuts and plans proposed by eurozone governments.
In a letter to the European Central Bank, European Commission and International Monetary Fund, he stated that his party “will remain committed to the programme’s objectives, targets and key policies.” Despite the fact that “policy modifications might be required to guarantee the programme’s full implementation,” Samaras and Greece will not act to change it.
Read more about the upcoming election.