This past weekend, the Greek government reached a tentative deal for a third bailout with other European countries. If approved by the Greek Parliament, Greece will cut pensions, reduce job protections and raise taxes in an effort to make the country more fiscally viable. In return, Greece will receive some amount north of 80 billion euros, allowing it make debt payments it lacked the funds to pay.
The details remain to be worked out, including Greece selling off some public assets like the national electricity operator. Undoubtedly, further complications could arise, including the Greek Parliament rejecting the agreement. However, as a next step, this is a positive for Europe, as Greece was casting a cloud of uncertainty over an otherwise improving set of economies. Overall, European unemployment is slowing coming down. Lower energy prices and an uptick in exports from a weak euro are further sources of growth.
Greece itself has a long way to go to return to fiscal health, with tremendous debts and a shrinking economy. But Greece remains a tiny part of Europes economy just 2% of countries using the euro. Assuming the deal comes together, this agreement will allow Europe to focus on improving all European economies, not just its weakest link.