Greece’s international creditors have insisted that Greece back an austerity package and the associated implementation bill in return for giving more money to the country. On Wednesday, parliament approved the five-year €28 billion ($40 billion) package of spending cuts and tax increases, leaving details of the cuts to be approved Thursday.
Once, and if, Thursday’s bill to implement the austerity measures is cleared, the eurozone and the International Monetary Fund will be in a position to release the €12 billion ($17 billion) that is due from last year’s package of rescue loans for Greece.
Without the financial assistance, Greece was facing bankruptcy as soon as the middle of July. A Greek default on its debts could trigger a major banking crisis and potential turmoil in global markets, similar to what happened when the Lehman Brothers investment house collapsed in 2008 in the United States.