Greece's Heavy Debt

Greece made preliminary bailout deal with international lenders. It is necessary to obtain the next tranche of loans, which, in turn, is needed to repay loans received earlier to save its economy.

In accordance with this agreement, Greece will have to achieve budgetary savings worth 2% of gross domestic product. This will be obtained by reducing pensions by 9% on average and de facto increase of income tax through the reduction of non-taxable income threshold.

In addition, Greece agreed to undertake labour reforms and privatize a number of state assets.