Sat, May 20, 2017 - Page 10 News List

Greece adopts austerity program

QUANTITATIVE EASING:Athens hopes the measures will give the country access to the ECB’s asset purchase program to help its return to bond markets next year


Riot police walk among flames from Molotov cocktails outside the Hellenic Parliament building in Athens on Thursday.

Photo: Reuters

The Greek parliament late on Thursday adopted a new round of austerity cuts that the government hopes will secure a pledge of debt relief and loan disbursements by EU-IMF creditors this month.

The bill entails 4.9 billion euros (US$5.45 billion) in pension cuts and lower tax breaks from next year to 2021 and was passed by a majority of 153 lawmakers from the ruling coalition.

A total of 128 lawmakers voted against the measure, while 17 lawmakers from the neo-Nazi Golden Dawn party were absent during the debate, as they were barred after one of their members shoved a rival in the Hellenic Parliament on Monday, prompting a showdown.

Prior to the vote, police fired tear gas as an anti-austerity demonstration outside parliament turned violent, with some hooded youths throwing Molotov cocktails.

More than 10,000 people took part in the protest, police said.

Greek Prime Minister Alexis Tsipras grudgingly accepted to legislate another round of cuts and lower tax breaks — applicable in 2019 and 2020 respectively — to unlock the cash payment ahead of looming debt repayments in July.

In return, Greece will introduce poverty support measures — such as subsidies on rent and medicine — over the same period of time.

Athens hopes the disbursement of 7 billion euros from existing bailout loans would be approved by a meeting of eurozone finance ministers on Monday.

“We are in the final stretch... The biggest likelihood is that we’ll have a deal on May 22 or a few days later,” Greek government spokesman Dimitris Tzanakopoulos told broadcaster Skai TV.

Greece is seeking a clear eurozone pledge later this month on measures to ease repayment on its huge public debt, which represented 179 percent of annual output at the end of last year.

In his calls for substantial debt relief, Tsipras faces resistance from Germany, where additional concessions are unpopular with an electorate called to a general election in September.

According to sources familiar with the matter, the IMF and eurozone countries are close to reaching a compromise, which would clear the way for a global agreement allowing Greece to return to bond markets next year.

“Right now, Germany and the IMF are in the final stretch of very tough negotiations going on between them,” Tzanakopoulos said.

Athens also hopes to be finally allowed access to the European Central Bank’s (ECB) asset purchase program, known as quantitative easing (QE), to help its return to bond markets.

“The key thing is to have a [debt] adjustment that will permit the ECB to induct the country to QE,” Tzanakopoulos said.

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