This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-13850580

The article has changed 13 times. There is an RSS feed of changes available.

Version 3 Version 4
Greece: Government to face vote of confidence Greece: Athens faces moment of truth, EU's Barroso says
(about 6 hours later)
 

What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
The government has already had to access a 110bn euro (£95bn; $146.2bn) bail-out package from the European Union and International Monetary Fund, and now needs a second bail-out.
Eurozone ministers are worried that if Greece were to default it would make it even more difficult for other countries such as Portugal and the Irish Republic to borrow money.
BACK {current} of {total} NEXT		 

What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
The government has already had to access a 110bn euro (£95bn; $146.2bn) bail-out package from the European Union and International Monetary Fund, and now needs a second bail-out.
Eurozone ministers are worried that if Greece were to default it would make it even more difficult for other countries such as Portugal and the Irish Republic to borrow money.
BACK {current} of {total} NEXT
The Greek government is due to face a vote of confidence, a crucial first step towards gaining a vital 12bn euro ($17bn; £10bn) loan. Greece faces a "moment of truth" as the government battles to win a vote of confidence, EU Commission President Jose Manuel Barroso has said.
If the government survives the vote, Greece's parliament will be asked to back the latest spending cuts - worth 28bn euro - on 28 June. The vote late on Tuesday is a first step towards a vital 12bn euro ($17bn; £10bn) loan from the EU and the International Monetary Fund (IMF).
These austerity measures and other reforms have to be introduced before the European Union and International Monetary Fund release the funds.
Greece needs the loan to pay its debts.Greece needs the loan to pay its debts.
If the government survives the vote, Greece's parliament will be asked to back the latest spending cuts - worth 28bn euro - on 28 June.
The EU and IMF will only release funds once the austerity measures have been voted through.
"No-one can be helped against their will," Mr Barroso said in Brussels.
"Next week is the moment of truth, where Greece needs to demonstrate that it is genuinely committed to the ambitious package of further fiscal measures and privatisations put forward by Prime Minister [George] Papandreou's government."
Protesters against the austerity plan have again gathered in Syntagma Square in Athens, in front of the Greek parliament.
One protester, Calliope Iris, told the BBC: "The Greek police treat us like criminals. I used to have my own company and had to close it down at the beginning of 2010. The economic climate is forbidding anything new.
"I will continue to go back to Syntagma Square to protest."
Mass demonstrationsMass demonstrations
Tuesday's vote of confidence is on the new Greek cabinet, which Prime Minister George Papandreou put in place last Friday. Tuesday's vote of confidence is on the new Greek cabinet, which Prime Minister Papandreou put in place last Friday.
Mr Papandreou hopes the new cabinet, and specifically the new Finance Minister, Evangelos Venizelos, will help secure parliament's backing for further austerity measures that are already proving deeply unpopular with the Greek people.Mr Papandreou hopes the new cabinet, and specifically the new Finance Minister, Evangelos Venizelos, will help secure parliament's backing for further austerity measures that are already proving deeply unpopular with the Greek people.
At the weekend eurozone finance ministers decided to postpone their decision on whether to grant Greece the 12bn euro loan until the country introduces the additional spending cuts and privatisation programmes. At the weekend, eurozone finance ministers decided to postpone their decision on whether to grant Greece the 12bn euro loan until the country introduces the additional spending cuts and privatisation programmes.
Greece needs this aid - the latest tranche of the EU and IMF's 110bn-euro aid package - by July to be able to keep up with payments to the creditors of its huge debts, which amount to 30,000 euros per person.Greece needs this aid - the latest tranche of the EU and IMF's 110bn-euro aid package - by July to be able to keep up with payments to the creditors of its huge debts, which amount to 30,000 euros per person.
If the Greek parliament does back the austerity measures, the eurozone finance ministers will meet again on 3 July, with the funds expected to be released by the middle of next month. If the Greek parliament does back the austerity measures, eurozone finance ministers will meet again on 3 July, with the funds expected to be released by the middle of next month.
However, lawmakers are having to ponder their decision in the face of mass demonstrations, strikes, and even riots.However, lawmakers are having to ponder their decision in the face of mass demonstrations, strikes, and even riots.
The latest protest against the cutbacks involves workers at Greece's state-owned electricity company, who are on a 48-hour walkout.The latest protest against the cutbacks involves workers at Greece's state-owned electricity company, who are on a 48-hour walkout.
BBC Europe editor Gavin Hewitt, who is in Athens, says ministers have argued that without further austerity measures in exchange for a new bail-out Greece is heading for bankruptcy, but many Greeks appear to prefer that option to further austerity. BBC Europe editor Gavin Hewitt, who is in Athens, says ministers have argued that without further austerity measures in exchange for a new bail-out, Greece is heading for bankruptcy. However, many Greeks appear to prefer that option to further austerity, he says.
Mr Venizelos said the decision of the eurozone finance ministers to delay the loan showed that urgent action was now needed. "We have plenty to do," he said.Mr Venizelos said the decision of the eurozone finance ministers to delay the loan showed that urgent action was now needed. "We have plenty to do," he said.
Some believe Greece should simply give up trying to pay its colossal debt, which is worth 150% of its annual GDP output. That would mean it having to leave the 17-member euro group of nations. If Greece were to default on its debt - worth 150% of its annual GDP output - it would have to leave the 17-member euro group of nations.
The Conservative MEP, Daniel Hannan, said the bailout would not help the people of Greece: "This is not assistance for Greece, it's not how anyone there sees it. They understand perfectly well what the bail-out means, which is that the money will go to European bankers and bond holders, but the repayment will come from Greek taxpayers. So far from being helped, Greece is being sacrificed to save the euro." UK Conservative MEP Daniel Hannan said the bailout would not help the people of Greece: "This is not assistance for Greece, it's not how anyone there sees it. They understand perfectly well what the bail-out means, which is that the money will go to European bankers and bondholders, but the repayment will come from Greek taxpayers. So far from being helped, Greece is being sacrificed to save the euro."
Olli Rehn, the European Union's Monetary Affairs Commissioner, urged Greece to continue with its austerity measures.Olli Rehn, the European Union's Monetary Affairs Commissioner, urged Greece to continue with its austerity measures.
"The greatest weight of responsibility lies on the shoulders of the new Greek government," he said."The greatest weight of responsibility lies on the shoulders of the new Greek government," he said.
Mr Rehn added that the situation in Greece was the worst crisis Europe had faced "since the Second World War".Mr Rehn added that the situation in Greece was the worst crisis Europe had faced "since the Second World War".
New aid IMF mission
A new aid package for Greece about the same size as the first, which was passed in May last year, was also agreed in principle by EU finance ministers on Sunday. On 20 June, EU finance ministers agreed in principle on a second bail-out package for Greece, about the same size as the first - 110bn euros - passed last May.
The new package, to be outlined by July, will include loans from other eurozone countries.The new package, to be outlined by July, will include loans from other eurozone countries.
It is also expected to feature a voluntary contribution from private investors, who will be invited to buy up new Greek bonds as old ones mature.It is also expected to feature a voluntary contribution from private investors, who will be invited to buy up new Greek bonds as old ones mature.
Officials said this money had to be freely given, or it would be seen as technical default on Greece's debt repayments.Officials said this money had to be freely given, or it would be seen as technical default on Greece's debt repayments.
If Greece were to default - or seen to be in default - it would mean massive losses for European banks that hold Greek debt, including the European Central Bank.If Greece were to default - or seen to be in default - it would mean massive losses for European banks that hold Greek debt, including the European Central Bank.
Officials said the new plan was expected to fund Greece into late 2014 and total about 120bn euros.Officials said the new plan was expected to fund Greece into late 2014 and total about 120bn euros.
Inspectors for the EU and IMF are making another visit to Athens on Tuesday in what the European Commission said would be a "technical mission".Inspectors for the EU and IMF are making another visit to Athens on Tuesday in what the European Commission said would be a "technical mission".
The visit, which comes after teams from both bodies have spent months poring through the country's accounts, is unscheduled and the Commission did not say what its objective would be. The visit, which comes after teams from both bodies have spent months poring through the country's accounts, is unscheduled, and the Commission did not say what its objective would be.