Greece gets 110 billion euros, biggest bailout in history

Greece got 110 billion euros from the euro zone countries and from the International Monetary Fund , the biggest financial aid for a country ever. In exchange for this money, which accounts for about half of the country's GDP (240 billion euros in 2009), the authorities in Athens pledged to adopt really harsh austerity measures. Greece promises budget spending cuts by up to 10% of the Gross Domestic Product (GDP), up to 30 billion euros in state budget savings until 2012, dropping the 13th and 14th salaries Greeks get for holidays and tax hikes, such as VAT, which should go up from 21% to 23%.

It remains to be seen, however, if the Greek state is able to keep its word and enforce the austerity measures it committed to. "The measures are very hard to stick to, considering Greece's past experience and the social opposition, which is high in this country, but the Greeks have no other option," said Ionut Dumitru, Raiffeisen Bank's chief economist.

The euro zone countries have always been regarded as examples of rigorousness and fiscal discipline, an essential pre-requirement to join the economic and monetary union. The irony of it all is that the weak links of the euro zone have to follow in Latvia's footsteps, one of the worst affected countries by the world crisis, which is not a euro zone member. The government of that Baltic state cut public sector employees wages' by 25% and laid off 20% of the people working in the sector.

Economics professor Daniel Daianu said the financial aid package given to Greece was not theoretically a bailout and could be regarded as help for European banking groups exposed to the country's economy.