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Here’s What Greece Has To Give Up if It Wants to Keep the Euro

Greece might have to give up early retirement and low taxes to stay in Europe.

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Another deadline came and went as another emergency summit to keep Greece in the eurozone stretched into Monday morning in Brussels without a solution. But a path to an endgame is now clear.

Early Monday morning, Athens agreed to a strict set of demands that go far beyond any austerity measures considered in the past. Under the new terms, Greek lawmakers have to pass a laundry list of spending, tax, pension, and other government reforms “without delay” in order to free up a third bailout of between 82 billion and 86 billion euros —  or $91.5 and $96 billion from its creditors at the International Monetary Fund, the European Commission, and the European Central Bank. The full list is below.

Athens only asked for a bailout of 53.3 billion euros, or $59 billion. But European officials determined Greece will need $20 billion more than it had initially asked for.

If it passes the new reforms, Greece would get a new loan that would allow it to pay back the $1.7 billion it’s in default to the IMF, as well as as well as the 6.7 billion euros, or $7.5 billion, that Greece owes the European Central Bank over the next two months. Greece could also use the money to keep its government solvent over the next three years.

Greek banks would also get be able to access an emergency line of credit cut off when its $265 billion bailout deal with its European partners expired. Banks there have been closed since June 29 and cash withdrawals have been limited to 60 euros, or about $67. They remain closed Monday. European lawmakers said they would continue to give them cash as Greek parliament considers European austerity demands.

In addition, Greece must create a fund comprised of proceeds raised by selling Greek government assets to help pay down what it owes. German Chancellor Angela Merkel said the size of the fund would “to the tune” of 50 billion euros, or $55 billion.

If they don’t, a so-called “Grexit” could occur, and Greece could be out of the eurozone.

These are just a few examples of options that were offered during intense negotiations. CNBC even reported the IFM, which Greece owes $1.7 million, had asked Greek Prime Minister Alexis Tsipras to resign, a report the financial news outlet quickly had to retract.

It now appears if Greece passes reforms demanded by its European partners, the five-year crisis will, at last, be over. If Greece doesn’t acquiesce to Europe, a whole new era would begin as a country leaves the currency union it joined in 2001. That’s never happened before and most expect the Greek economy to plummet more than it already has.

Unemployment there is at 25 percent, a figure that would spike higher if a Grexit occurs. Its debt to GDP ratio in 2014 was 177 percent, the highest in Europe.

The ultimatum comes as Europeans split on how hard a line to take on Greece. Germany, backed by Finland and eastern European nations, did as Merkel promised and refused to yield. Officials from these countries said they don’t trust Greece would follow through with austerity demands its people rejected in a referendum last Sunday, but passed by their government Friday.

For his part, Tsipras must quell an uprising in his far-left Syriza party, who insist they won’t bow to Europe’s demands to cut beloved social service programs and generous pension benefits. He has two days to convince lawmakers to capitulate. But ahead of the agreement Sunday evening, there are already signs his peers are in no mood.

“What is at play here is an attempt to humiliate Greece and Greeks, or to overthrow the Tsipras government,” Dimitrios Papadimoulis, a Syriza party member and vice president of the European Parliament said on Greek television Sunday.

Photo Credit: Andreas Solaro/Getty Images

David Francis was a senior reporter for Foreign Policy, where he covered international finance. @davidcfrancis

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