Greek Parliament Approves $40B Bailout; Some Economists Predict Vote Will Worsen the Recession

The Greek parliament was set to approve a $40 billion package of spending cuts, tax increases and privatizations as a condition for a massive bailout to avert the Eurozone’s first default. Without a new plan in place, the European Union and International Monetary Fund said they would withhold 12 billion euros of loans which Greece needs to repay debts due in mid-July. Meanwhile, French Finance Minister Christine Lagarde has been named the new chief of the International Monetary Fund. She received backing from the United States and Europe and key emerging market nations, including China, India and Brazil. The first woman to hold the position, she begins her five-year term on July 5. In her first public comments following her appointment, Lagarde urged Greek politicians to unite to avoid a debt default. We are joined by Mark Weisbrot, an economist and the co-director of the Center for Economic and Policy Research. “There’s going to be a default right up the road, so they could default now and they could refuse to accept these conditions,” says Weisbrot. “They may be better off for that, especially, if the result of what is going to play out is years of recession and high unemployment.”

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Source: Democracy Now!