ROME — As politicians and finance ministers work to keep crisis-hit Greece within the Euro-zone, analysts have warned of far-reaching consequences for security in the Mediterranean if the country is cut loose.
After months of wrangling with creditors, the debt-saddled country appeared close to tumbling out of the euro zone last week after Greeks voted to refuse a package of cuts and tax hikes proposed by the European Union.
In return for the cuts, the EU was offering a new bailout to keep Greece from defaulting on its debt.
But as the week wore on, and as European politicians refused to budge, Greek Prime Minister Alexis Tsipras appeared to buckle under pressure and come back to the negotiating table, offering to make cuts to public spending.
The deal, which was due to be discussed by European leaders July 12, involves a €100 million (US $110.5 million) cut in defense spending this year and a €200 million cut in 2016, less than the €400 million proposed by the EU.
Ahead of the announcement, European Commission President Jean-Claude Juncker said defense cuts were feasible.
“I proposed to them [Greece] to replace the VAT [value added tax] measures by other means, and by other instruments, one of these being a modest cut in the Greek defense budget. This could be easily done,” he said.